Preamble

The House met at half-past Nine o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Overseas Development

Miss Joan Lestor: I beg to move,
That this House deplores the widespread poverty, malnutrition and infant mortality, that afflict so many nations in the developing world; calls on the Government substantially to extend measures of debt reduction for both the poorest and middle-income heavily indebted nations; requests that the Overseas Development Administration establish a timetable to achieve the UN target for overseas aid of 0·7 per cent. of gross national product; and urges the Government to work to achieve international agreement to ensure that the negative transfer of resources from the developing to the developed world is reversed.
I was in some doubt as to where I should stand when moving this motion. As Opposition Front Bench spokesperson on aid and development I became frustrated by the fact that we were never given a Supply day because the Government did not consider the subject important enough to grant us a day's debate. Therefore, I decided to chance my luck and put in for a Back Bench motion, and I considered moving the motion from the Back Benches and coming down to the Front Bench to intervene during the debate. I thought that might cause confusion and, therefore, decided to do both from the Front Bench and thus, perhaps, enhance the status of the debate. After 19 years in the House—including a short break when resting—[HON. MEMBERS: "Disgraceful."] It was disgraceful, I agree, but the electorate can be fickle. This is the first time that I have had the good luck to come first in the ballot for private Member's motions.
I decided to put down the motion in this form because I wanted to make it as wide as possible to allow hon. Members to raise their particular interests during the debate. I shall concentrate on one or two particular matters—obviously, I shall have to leave out others.
At 1 o'clock on Tuesday morning, we managed to have a debate—when the Minister for Overseas Development was travelling back from a visit abroad involving these very matters. We are indebted to my hon. Friend the Member for Linlithgow (Mr. Dalyell) for raising the subject of rain forests—and doing so in a graphic and startling fashion. Although I cannot pursue that subject today, I know that yesterday he asked several questions about it during the Budget debate. I hope that the Chancellor, or whoever is responsible for such matters, will deal with my hon. Friend's questions urgently, because they are extremely important. If we had time this would bring us to the Bruntland report and to what is happening to the environment in many developing countries. I hope that other hon. Members will deal with the EEC and 1992 and Lomé, and the problem of where we go from here.
In recent years the people of this country and many other parts of the industrialised world—there was evidence

of it again only last week—have responded generously and with great feeling and commitment to the horrors of famine, war, disease, malnutrition, drought and debt that have confronted them in the media. UNICEF estimates that in the past 12 months 500,000 children have died as a result of the slowing down or reversal of development. That has been enough to make people respond generously, as they did for Comic Relief—and to ask why it is happening. For these children are dying not from the causes I mentioned a moment ago—famine, disease, war or drought—but from the failure of efforts to increase their chances of survival. The figures show that their chances are often reduced in spite of our efforts and the efforts of the Government, voluntary organisations and the British public, who have responded so generously to the various appeals.
UNICEF's recent disclosure that throughout Africa and Latin America average family incomes have fallen by between 10 and 25 per cent. since 1980 has shown that the availability of the bare necessities of life has been restricted for the poorest people. Child malnutrition is nom, on the increase in many countries. I remind the House—although many hon. Members are aware of it—that a third of all child deaths occur in just three countries—Bangladesh, India and Pakistan. It is tragic to witness that and to have to acknowledge it almost 30 years after the United Nations proclaimed the first development decade.
Governments in debt to the richer nations have been forced to cut expenditure on social services; 40 of the least developed countries have slashed spending on health by 50 per cent. a head and on education by 25 per cent. a head in the past few years. The proportion of six to 11-year olds who are at school in Third world countries is now falling.
There is, too, the problem of the southern African front-line states. In a spirit of agreement or fellow feeling, I want to point out that my union, the General, Municipal, Boilermakers and Allied Trades Union, launched an appeal for Mozambique and, on behalf of UNICEF, I went to see what was happening there and to witness the devastation that has been caused by the bandits Renamo. When I returned and reported the plight of a particular hospital in the Gaza province to the Minister he contributed £60,000 to the appeal to equip the hospital. When I saw it it had no blankets, medicines, mattresses, or bandages—it had nothing. It had been starved and robbed by the bandits, who are destabilising the whole country.
In the context of the south African development co-ordination conference countries, it is unfortunate that our bilateral aid in 1987 was only 64 per cent. of its 1979 level in real terms. That represents a cumulative loss up to 1987 of about $480 million in real terms. The Commonwealth committee of Foreign Ministers on southern Africa reported in February this year that the cost of south Africa's destabilisation has been well over one million people killed and several million disabled and estimated damage of about $35 billion since 1980. So whatever we do to help Mozambique—the Government have done much more for it than for some other front-line states—these countries are being destabilised and are losing out rapidly.
Whether we are discussing the front-line states or other parts of the developing world, those of us who have seen the results of poverty, malnutrition, drought, disease, famine and war, as many hon. Members and the Minister have frequently done, know that for these millions of people the name of the game is survival, and that many are


losing that game. The children of Third world countries are paying those countries' debts with their lives. That is one of the most appalling things that we must recognise.
I pay tribute to all the Government and voluntary agencies and the people who are working in Third world countries and doing their best, often in appallingly difficult circumstances, to meet some of the challenges of directing programmes to the poor and of doing as UNICEF and other bodies have done—carrying out programmes of immunisation to try to save children and taking part in a variety of projects. They know the long-lasting effects that such work will have. Our Government are responsible for ensuring that they make a far greater contribution than in recent years.
In the 1960s the United Nations proclaimed the first development decade in a spirit of optimism and progress that has been short-lived. The 1980s have been a decade of debt, not development. Economic growth and social progress have been stalled. There has been little or no development. In its place, debt has grown, accompanied by rising malnutrition, poverty and infant mortality throughout Africa and Latin America.
When I first took up these responsibilities I went to see the IMF and the World Bank, institutions that were not well known to me at that time, and like my hon. Friend the Member for Vauxhall (Mr. Holland)—for many years he has done a great deal of work in this area—I became convinced that the one overwhelming problem that we now faced was is debt.
The most graphic illustration of the debt decade is the negative transfer of funds from north to south; the positive investment and development of the 1960s and 1970s have been reversed. Since the early 1980s, the heavily indebted countries of the Third world have been forced to make massive annual repayments. A positive transfer in favour of the Third world of more than $30 billion has turned into a negative flow that amounted to $29 billion in 1987. The major debtor countries, most of which are to be found in Latin America, have thereby had their long-term growth prospects undermined, and domestic investment has collapsed. Per capita income has fallen by 30 per cent. in real terms. To sustain their debt service these countries have been forced to boost exports and to cut imports. Their volume of imports has declined by 40 per cent. since 1980. Import compression on this scale has caused a similar massive decline in domestic investment, which diminishes prospects for further growth.
Despite these efforts, the burden of debt is increasing. According to an analysis by the United Nations conference on trade and development, the aggregate debt profile of the most heavily indebted countries is worse today than when the crisis first emerged in 1982. Their debt as a ratio of GDP rose last year to 50 per cent. from 42 per cent. in 1982. The debtors' plight in Latin America and elsewhere remains a drag on world economic growth and harms the trading interests of the creditor nations.
The leaders of the industrialised nations have yet to understand the lessons of interdependence that were so powerfully expressed in the original and subsequent reports of the Brandt commission—a best seller in its day, which proves the point that I made about the interest of large numbers of people in these matters.
The debt problems of the developing countries caused by monetarist policies of deflation and high interest rates have damaged north-south trade. Overseas sales and domestic growth in the industrialised countries have been lost. According to UNCTAD, by 1984 total OECD exports to developing countries were about $46 billion a year below their average for 1980–81—a trade loss that has cost as many as three million jobs in industry in this country and diminished tax revenues from companies and employees throughout the industrialised world.
Despite the 1985 plan proposed by former United States Treasury Secretary Jim Baker, negative transfers persist. While the debt crisis may have been contained, it has not been solved. The major debtors are making unparalleled repayments at huge economic and social cost while the creditors lose both export markets and jobs.
Meanwhile, the commercial banks have led a private sector stampede away from the business of overseas development. The banks have offered virtually no new loans to the debtors since 1982. According to the IMF, there has been a precipitous drop in private financial flows to the Third world. The banks have unambiguously declared their refusal to consider a new wave of lending to refinance even the most successful adjustment programmes and efforts of the debtor nations.
As a result, as the House is aware, the public sector is forced to fill that financial gap. The share of total finance to the major debtors accounted for by the public sector has risen from 10 per cent. between 1979 and 1982 to more than 60 per cent. between 1983 and 1987. It is high time that policy makers in the leading industrialised countries accepted the market's hidden realism about the debts crisis. I hope that the new plan proposed by the United States Treasury Screetary Mr. Brady will mark a significant shift in policy. I know that it is too early to know what the scheme offers, but I hope that the forthcoming spring meetings of the World Bank and the IMF in Washington will break new ground.
A co-operative and explicitly political solution to the debt crisis is undoubtedly needed. The scope exists for a bargain to be struck between debtors and creditors, both public and private. We need to achieve debt reduction that will enhance growth in trade. A number of proposals already exist for the creation of an institution, perhaps an affiliate to the World Bank, capitalised by the creditor nation Governments which can offer funds or guarantee to facilitate debt reduction. Such schemes might involve the provision of fixed interest bonds against which commercial banks can exchange, at a discount, some of the developing country loans in their portfolios. As a result of that, the burden of the debtor nation would be reduced, stimulating development and trade while the bank's balance sheet would also improve. All those proposals are worth considering.
Critics of debt relief argue that taxpayers' money would be offered to bail out the banks. However, the taxpayer is already giving relief to the banks for debt improvisation and more widely suffering the lost revenues resulting from diminished trade and employment caused by the debt crisis. To be credible and fair, any scheme of debt reduction must ensure that the banks shoulder a significant proportion of any loss.
Inevitably, the public sector must play a key role in debt reduction. The World Bank and the IMF are already providing publicly funded resources to assist the adjustment processes of the Third world. Those agencies


are obviously central to a programme of debt reduction and they will need greater resources in future. The surplus nations of the group of 7, especially Japan, could make a substantial major contribution.
Debt reduction does not imply a generalised write-off of the liabilities of countries like those in Latin America. The magnitude of capital flight from that region clearly illustrates the moral hazard of unconditional debt relief. Any new mechanism for debt reduction, probably managed by the World Bank, would of necessity adopt a case by case approach offering phased rather than one-off debt reduction. I am glad to see that the Minister thinks that that is a good idea. Those are the broad parameters of a politically feasible scheme of debt reduction. Such a co-operative approach would offer the prospect for shared benefits by debtor and creditor nations alike while promoting international trade and world economic growth.
In the absence of agreement on debt relief, there is a real threat that the present strategy of containment of the debt crisis will break down. The debts of Latin America and elsewhere are highly sensitive, as we all know, to rising dollar interest rates and the prospects of improvement in the trade deficit of the United States. Therefore, action now to achieve debt reduction would sharply reduce the risks of a recession caused by economic adjustment in America.
The lesson of the debt crisis is that international financial flows need public sector guidance. The bank lending spree of the 1970s produced the classic market failure of boom and bust. Today all forms of private finance, including direct investment and bank lending, have made an ungainly retreat from the Third world.

Mr. Matthew Carrington: This is very important. I understand entirely what the hon. Lady has said about debt reduction. I was heavily involved in making many of those loans when the lending boom was going on. I recognise that many of the loans that were made then were unwise on the part of the banks and probably unwise from the point of view of development in those countries. However, it is important to remember that those loans were borrowed at the instigation of the countries that borrowed them. Very few of the loans made to Latin America were made other than to the Governments of the countries concerned. The proposals put up for those loans were backed by development information which clearly showed that that country not only believed that it could repay the loan, but that the loan would be beneficial to the country's development. Our problem in the future, as I understand it, is that if we are to do what the hon. Lady has suggested, we must somehow control how those countries use the money that they borrow.

Miss Lestor: I do not disagree entirely with the hon. Gentleman. However, I find it incredibly easy to borrow money. I receive invitations daily telling me how simple it is to borrow. I need only take this mock cheque or whatever and I can have as much as I like. Of course the loans were made at the request of the Governments concerned, but, my God, it was made extremely easy for many of them to borrow and the fact that things might go wrong was left out of the account. I do not want to pursue that because I want to achieve agreement in the House on these issues. I do not want people to look back. However,

if we consider the history of some of the loans, it is obvious that they were made extremely attractive. The posibility of the economies going wrong was left out of the account. Similarly, if the interest rates and mortgage rates rise in this country and if commodity prices fall, what happens then? I am sure that the hon. Member for Fulham (Mr. Carrington) will make his contribution later.
In future we must ensure that there is a positive and more sustainable balance of public and private sector finance for development. Measures for debt reduction are essential to reduce today's negative flows of funds from the south to the north. Fortunately, sub-Saharan Africa has already gained some measure of debt relief. Africa's financial quagmire is forcing the conservative advocates of sound money and balanced budgets to think again. Nevertheless, the continent is today suffering from an acute financial famine.
According to the recent report to the United Nations secretary-general prepared by an expert group under the chairmanship of Sir Douglas Wass, Africa needs a minimum of $5 billion a year to overcome its chronic debt and development crisis. The report warns that almost all of sub-Saharan Africa is suffering from import strangulation. Machinery is breaking down for want of spare parts, development programmes are under threat and per capita GDP has fallen by 2·9 per cent. each year during the 1980s.
I acknowledge that some progress on African debt has been made. For example, we have the much trumpeted plan from the Chancellor of the Exchequer. As the House will be aware, at the recent annual meeting of the World Bank and the IMF in Berlin, agreement was reached on a plan, which was jointly promoted by Britain and France, to assist the poorest African debtors. The plan offers debt forgiveness, reduced interest rates and longer-term loan rescheduling. The Labour party fully supports that plan as far as it goes. It would be churlish of us not to do so. I welcome it and hope that other industrialised countries will act on the urgent need for debt relief in Africa.
It is not hard for us to offer bipartisan support for the initiative, because the scale of Africa's plight warrants a united approach and because the plan was of course inherited from the Labour party. As long ago as 1978, Judith Hart, the then Minister of State for Overseas Development, negotiated an agreement at UNCTAD to turn former official aid loans to the poorest countries into grants. That scheme freed the debtor from many outstanding repayments and covered public as distinct from private debts for many low income countries.
The Conservative Government elected in 1979 continued that policy. Subsequently, about £1 billion has been written off, of which £260 million was owed by African debtors. Reduced interest rates and longer-term rescheduling figured prominently in our policy statement on overseas development that was published at the time of the last general election. It is gratifying that the Chancellor has borrowed from that policy and is carrying forward the achievements of the last Labour Government.
However, it remains distressing that there has been a massive real decline in Britain's aid programme and in the assistance that we give to Africa. The Tory Government have allowed aid as a percentage of our gross national product to fall to a record low of 0·28 per cent. As a result, our level of aid to sub-Saharan Africa in 1987 was 26 per cent. lower than that achieved in 1979. The accumulative loss in real terms over that period was a massive £600 million.
At a recent sports event to raise money in the Minister's constituency, he and I took part in the presentation of a mock cheque for that amount, to show what the aid budget would have been had the achievements of 1979 been carried forward. However, I am aiming for unity today and I do not wish to score points.
The Chancellor's credibility in championing debt relief for Africa collapses in the wake of such an appallingly low level of development aid. Of course we welcome moves towards debt relief, as I have already said, but when one compares it with the declining level of aid given, the comparison is not flattering. As long ago as 1983, the Prime Minister accepted that the Government should move towards the United Nations' target for overseas aid "when economic circumstances permit". I cannot imagine that there is any excuse today for not substantially increasing our aid programme. On Tuesday, the Chancellor revealed to the House that he had a surplus of more than £14 billion, so he certainly has the resources available.
The Chancellor says that he cannot spend those funds, because he is worried about domestic inflation and our balance of payments, but those constraints do not apply to overseas aid. Such expenditure would not be inflationary since the money would go abroad and, by assisting British industry, would also help our export performance. The case for a substantial increase in aid has never been stronger, as the words of the Prime Minister herself demonstrate.
Britain must improve her performance in respect of overseas aid. It is shameful that the OECD's recent review of the British aid programme is sharply critical of our record, as was the report of the Select Committee. The OECD states unequivocally that the time has come for Britain to reverse the decline in her aid to GNP ratio. It refers also to burden-sharing among the major donor nations, with a straightforward and deeply humiliating expression of concern that Britain is not pulling her weight or honouring her commitment to reach the United Nations' target—a target that has been accepted even by the Prime Minister.
The motion before the House urges the Government to re-establish a timetable of expenditure increases to reach the United Nations' target. That proposal was also made in the last Session, in a Bill introduced by my hon. Friend the Member for Cunninghame, North (Mr. Wilson). I hope that the Minister will reconsider his opposition to the expenditure timetable, because without such a measure of progress the Government will never restore the ratio—at least, not to the level they inherited from the last Labour Government.
More aid must be combined with more debt relief. The debt crisis emphatically demonstrates the inadequacy of the existing Bretton Woods institutions—the International Monetary Fund, the World Bank and the General Agreement on Tariffs and Trade. Those institutions were established in 1945 to promote the financial and economic reconstruction of post-war industrial Europe, and not the development of low-income countries in Africa, Asia and Latin America. Their management structure and economic assumptions have not adapted to the new diversity of problems.
Changes to the Bretton Woods institutions have been resisted by conservative governments in the West, but new opportunities for modernising them are on the horizon. The increased self-confidence of the EEC as it moves towards 1992, and the new interest of the Soviet Union and of China in possible membership of those institutions suggest that there is a serious prospect of modernisation in the 1990s. My hon. Friend the Member for Vauxhall has done a great deal of work in respect of all those matters.
Africa has accumulated a heavy burden of debt to multilateral agencies, especially the World Bank. Much of that debt cannot be rescheduled for fear of damaging the bank's own credit rating, but without relief, many countries risk falling into arrears with the World Bank, as some have already done with the IMF. The bank may soon become part of Africa's debt problem rather than be a contributor to its solution.
Debt service to the World Bank in 1986 amounted to 67 per cent. of Tanzania's public debt service, 46 per cent. of that of Zambia, and 30 per cent. of that of Kenya. The Nordic countries have, in response, proposed the creation of a facility to refinance a substantial proportion of those debts. The World Bank responded to that idea by creating a special fund through which donors can offer additional aid. The fund will pay for the ending of some outstanding loans, thus alleviating the burden of repayment for the debtors. The British Government should be prepared to contribute to the Nordic scheme. I have made that point before, and I look forward to the Minister's comments.
The World Bank should also offer to convert outstanding soft loans offered by the International Development Association to grants. IDA credits now amount to 29 billion dollars. The next IDA replenishment, which will be negotiated early next year, should be wholly in the form of grants, not loans. I understand that former IDA recipients such as South Korea might benefit from that scheme. The Minister made that point to me when we last debated these matters in Committee, and I accept the truth of it. However, special arrangements could be negotiated so that countries no longer eligible for IDA funds could make special repayments equivalent to their outstanding loans. There does not have to be one overall policy for all countries. Such payments could be made into the Nordic facility that I mentioned.
A package of additional measures of debt relief combined with increased aid, which is urgently needed, would help to break Africa's downward spiral of poverty and debt. Today, as in the past, we are trying to play a constructive role in tackling the debt crisis and promoting growth in and trade with the Third world.
Our strategy is to meet the challenge of development. If we do not meet that challenge, we shall find that there are serious repercussions. Monetarist dogma has made the 1980s the decade of debt. As we reach the 1990s, we must ensure that we move out of debt and into development. If we fail, more children will die. I began my speech by referring to the increase in child deaths. Without aid, more services will be cut and the gap between the developed world and the developing world will widen. The consequences are too terrifying to contemplate.

The Minister for Overseas Development (Mr. Chris Patten): I congratulate the hon. Member for Eccles (Miss Lestor) on her luck. I am extremely glad that, having won


the ballot, she chose to debate this subject. I suppose, to follow the hon. Lady's remarks, that it is rather like winning first prize in a raffle and choosing to have dinner with one's self.

Mr. Frank Dobson: One could not make a better choice.

Mr. Patten: I much agree with the hon. Gentleman's comment, but do not want to be accused of making a sexist remark. We all thank the hon. Lady for choosing the subject of overseas development. As she said, the House does not often have an opportunity to debate aid and development. That is not because of any lack of public interest, because we saw from the response to Comic Relief how much public interest does exist. There is certainly public interest, but I do not think that there is much public controversy about our aid programme, with one exception. That general agreement is reflected in the main reports of the Select Committee on Foreign Affairs and in what the Public Accounts Committee had to say the other day, namely:
We consider that the Overseas Development Administration have adopted a generally sound approach to monitoring and controlling the Multilateral Aid programme.
I am delighted with that endorsement, and only sorry that it was not reflected in all the press reports on the PAC's findings.
We have a sensible and effective aid programme, the quality of which is generally reckoned to be as high as anyone's. Of course it is not perfect; we go on trying to improve it and to sharpen our performance in helping poor people and countries, and in helping to promote sustainable development. The controversy, such as it is, concentrates not on what we do but on how much we do. I intend to deal with that at the close of my remarks, but first I want to present a general review of how our aid strategy touches on some of the main points raised by the hon. Member for Eccles.
I think—at least, I hope—that the hon. Lady will accept that the story of aid and development is not one of unmitigated disaster. We tend to concentrate on the problems that confront developing countries. That is not surprising as those problems are so formidable, but we should remember some of the successes, too, and learn from them. Aid in the past couple of decades has helped developing countries to secure a fall in child mortality rates far sharper, and over a shorter period, than we have ever managed in most developed countries, although the rates are still far too high. It has helped developing countries to increase life expectancy rather more rapidly than we have managed in developed countries. It has also helped to improve literacy rates and enrolment in primary schools more rapidly, and to increase access to potable water. Those are all successes, and I think that they justify the use of aid for sensible, effective and well targeted programmes.
We can also point to individual sectoral and national success stories. We can point, for example, to the green revolution in Asia, the extraordinary agricultural successes in a number of Asian countries—as a result partly of farmers being offered a decent price, partly of the application of appropriate science and technology to agricultural techniques and partly of the development of good and effective agricultural extension services. We have also seen the spectacular take-off of individual Asian

economies—particularly those in east Asia, although they are now being followed rapidly by a number of economies in south-east Asia.
How have those countries achieved so much? First, they have had a good deal of support from outside, both official development assistance and private investment, and they have used that support well. Secondly, they have attracted private investment because of the sensible way in which they have run their economies. Thirdly, they have usually enjoyed political stability. Fourthly, they have followed a market-oriented economic policy and prudent financial policies, and have believed in the price mechanism. Fifthly, they have placed equal emphasis on a few simple social goals, above all, basic education and training and basic health care. They have invested in their people, and the rest of the world has therefore invested in them.
It is interesting to note that 25 years ago everyone thought that Africa would be the success story in development and that Asia would be where all the tragedies were played out. It has, alas, turned out to be the other way round. We certainly should not under-estimate the scale of the problems that Africa has had to face in the past few years—war and civil conflict, ecological degradation, appalling health problems and now the terrible scourge of AIDS. It has had to face a fall in the price of many of the basic commodities that it exports; it has often had to face an unfavourable international economic environment. At the same time, too many African countries have been implementing policies that have been at best inappropriate and at worst disastrous.
As a result, in the 1980s much of Africa has suffered a slump in living standards rather greater than the one that we suffered in the north of the globe in the 1920s and 1930s, and it has done so albeit from a far lower standard of living. I think that it is fair to argue, however, that we have now reached a turning point. Let me quote from the recently published report by the World Bank and the United Nations development programme on Africa's adjustment and growth in the 1980s:
The evidence of the past three years leaves room for optimism. These encouraging signs, though still preliminary, augur well for the future.
The vice-president of the World Bank responsible for the Africa region, and the assistant administrator of the U N DP responsible for the regional bureau for Africa, say in their foreword to the report, "Recovery has begun."
As the report says, the evidence of the past three years gives us some grounds for hope. The report refers to the growing economic reform movement in Africa, which is gathering strength throughout the region. More than half its countries have now undertaken significant reforms. They are cutting back unnecessary bureaucracy, setting more realistic exchange rates, curbing inflation, improving incentives for farmers, liberalising their economies and encouraging the private sector. We know that that reform process can be uncomfortable and even painful; we also know that it requires considerable political courage to implement many of the reforms.

Mr. Tam Dalyell: The Minister will be aware of the argument that the instructions given by the Government to the British director of the World Bank—at present Mr. Cassell—are less publicised than those given by the Americans to their director. Would it not be proper to tell the House exactly what we are saying to our director, and how we operate?

Mr. Patten: I note that the hon. Gentleman made that point in his recent speech. I am delighted to deal with it now, although it interrupts the flow of my argument. If the hon. Gentleman does not mind my saying so, he makes something of a false point. It is of course inconceivable that I could avoid explaining in terms to the House what the Government proposed to do about a matter as controversial as the one that I think gave rise to his question—the World Bank loan to the power sector in Brazil. Beyond that, I have given an assurance to environmental NGOs and other interested parties that we will consult them before making up our mind what to do on the board of the World Bank about that proposed loan, and about other equally controversial matters affecting the environment. I do not think that it is reasonable or possible to be much more open than that, while at the same time taking account of the need for commercial sensitivity from time to time in view of some of the operations that we are discussing on the board.
I agree, however, that the point that the hon. Gentleman has raised has caused concern to many people over the years. My strong feeling is that it is always better to say more rather than less on these issues and that, as we have to do that anyway at the end of the day, we might as well start off by doing it. I hope that I have answered the hon. Gentleman's question.

Mr. Dalyell: I thank the Minister.

Mr. Patten: Two things stand out reasonably clearly so far from the success of the reform movement in Africa. First, to carry on with misguided policies has only one result. It impoverishes those who are already poor. Secondly, the reform programmes are starting to show results. The results are set out in terms in the report to which I referred. The most obvious consequence is a revival of growth, especially in the agricultural sector. For many countries that have abandoned the failed policies of the 1970s, not only is growth higher but their exports are higher. Farmers' real incomes have also increased. The policies have attracted donor support, by means of both conventional aid programmes and debt initiatives. We have been, and we shall remain, prominent on both counts.
The House knows that we are providing a growing share of our aid programme to support economic policy reform, especially in Africa but also elsewhere. Just over a year ago, we pledged up to £250 million of bilateral programme aid—balance of payments support—over three years to the World Bank's co-ordinated special programme of action for the poorest and most heavily indebted countries of sub-Saharan Africa. In 1988, we made new programme aid commitments to sub-Saharan Africa of over £100 million. The House also knows about the central role that we have played recently in support of the Nigerian economic reform programme. We played the leading role—I think one can say that without vanity—in co-ordinating the international community's assistance to the Nigerian economic reform programme. We decided to contribute $100 million to that reform programme. Over two thirds of it was new money. It was a genuine addition to our published aid programme. I am delighted that we have made such good progress in bringing together support for that crucial reform programme in west Africa.
Last month I was in Uganda. While I was there I was able to commit a further £21 million of grant aid to

Uganda, including £10 million of programme aid to that country's economic reform programme. That brings to about £110 million the money that we have either committed to or spent in Uganda since President Museveni came to power. It is clear that President Museveni and his Government face problems of Herculean size in the next few years, after the horrors of the last 10 to 15 years. I was extremely impressed by the progress that Uganda has already made in starting to tackle some of those horrific problems. The country deserves and, for my part, it will continue to receive as much support as possible.
I am sure that the House is also aware that one of the most successful stories of adjustment is that of Ghana. I am pleased to be able to tell the House that we propose to pledge a further £20 million to support Ghana's economic recovery programme and that we also intend to spend an additional £10 million to support Kenya's programme. The House may recollect that we have agreed to make the largest single contribution to the interest subsidy account of the International Monetary Fund's enhanced structural adjustment facility. Britain's contribution will be sufficient to subsidise up to £750 million of new lending.
I should like to deal with two additional points that are also relevant. First, I believe that there is a remarkable convergence of thinking within and between OECD countries and developing countries about the need for policy reform if growth prospects are to be restored and poverty is to be overcome. There is wide consensus that aid for bad policies is wasted aid. However, our critics suggest that there is a severe social impact as a result of the reform programmes and that there is still a shortage of funds to support reform and economic development.
It should be recognised that there is a calamitous social impact if countries do not reform. However, it is a fair point that in the early stages of the reform movement not enough account was taken by all donors of the social or environmental impact of structural adjustment programmes. That position is changing—partly, no doubt, thanks to the advocacy of organisations such as UNICEF. When programmes are designed, we are now taking far greater account of the social dimension. We are playing our part—I refer to what we are doing in Tanzania and Ghana—and we shall also play our part in paying for the consequences.
Although it is true that reform has attracted greater finance from donors, more funds will be needed as more aid recipients embark—as we all hope they will—on restructuring programmes. It is wrong to misuse figures. The last part of the motion tabled by the hon. Member for Eccles is seriously misleading and she developed the point during her speech. She referred to a large net transfer from developing to developed countries and used a World Bank figure. Given the statistical parameters within which she was working, she could have used the large figure of $43 billion that has been reported in the press during the last few days.
The way in which figures have been used is misleading on a number of counts. That figure covers all developing countries. There is no reason why the newly-prosperous developing countries, such as Korea, should not pay back the money that they have borrowed to develop their industries. It does not make sense to behave as though Korea and Mozambique are in precisely the same category. We should be concerned about the position of the poorest countries. It is even more significant that the


figure that the hon. Lady used takes no account of other flows, such as grant aid. The figure measures only the difference between the repayment of loans and known and new lending.
If we include grants—which seems to me, as we are talking about overseas development, to be not unreasonable—and look at net capital flows to sub-Saharan Africa, a very different picture emerges from that which was suggested by the hon. Lady. According to the OECD figures, the flows of funds to this extremely poor region—probably the poorest region in the world—have been strongly positive throughout the 1980s. In 1987 they amounted to $20 billion—or, to be strictly accurate, to $15 billion after deducting interest payments. That is, to repeat myself, a different picture from that which was painted by the hon. Lady and by her motion.

Mr. Tom Clarke: As the Minister is dealing with statistics, can he tell the House when the Government expect to achieve the United Nations target of 0·7 per cent. GNP?

Mr. Patten: As I said at the outset of my remarks, I intend to deal with volume and the percentage of GNP at the end of my speech. I can assure the hon. Gentleman that I shall not disappoint him. I shall turn to the issue with considerable relish.
Debt naturally affects capital flows. The hon. Lady was right to make that point. She made a number of interesting observations about it. Third world debt is over $1,000 billion.

Mr. Bowen Wells: Before my hon. Friend moves on to his next subject of debt, will he give the House the details of the amount of money that he has transferred from the Indian and Asian programmes to Africa in the past two or three years, as there has been a major change of thrust and in the amount of money from ODA into Africa?

Mr. Patten: It would be fairer to say that we have used the welcome increase in our aid programme to support our programmes in Africa. We have spent less in India in the past two years mainly because we did not have sufficient projects in the pipeline, but I am about to announce new projects in the pipeline which may adjust that balance in future. Nevertheless, it is true, as my hon. Friend suggests, that the bulk of our new enhanced expenditure will be used to support economic reforms in sub-Saharan Africa.
As I said, half of Third world debt—about $500 billion—is in sub-Saharan Africa and Latin America. As the hon. Lady made clear, that sum has been the focus of particular attention. The poorest indebted countries are those in Africa and they owe about $100 billion in debt, mainly to the multilateral institutions and to Governments. We have put a great deal of effort into trying to help solve their problems. The House will be aware of our successes. Last year we finally achieved international agreement on the Chancellor's debt initiative at the Toronto summit. It provides a menu of different ways for providing concessional rescheduling of bilateral official debts from the poorest and most heavily indebted countries that are trying to pursue sensible policies. We shall agree to long-term rescheduling of bilateral official debt at concessional interest rates. Already seven African countries have negotiated concessional Toronto terms in the Paris club, and more will follow. As regards aid debts

we have led the way in converting past aid loans to grants and the policy of retrospective terms adjustment has relieved the poorest countries of aid debts totalling more than £1 billion. As the hon. Lady said, that includes 13 of the poorest countries in Africa at a cost of £260 million. I am delighted to learn that one of my predecessors, Baroness Hart, had the same idea. Fortunately, after the 1979 general election we were in a position to do something about it.

Mr. Stuart Holland: Oh, that is very clever—really clever

Mr. Patten: I am sure that the hon. Member for Vauxhall (Mr. Holland) made a major contribution to the fact that we have been able to discharge those obligations.
Latin America has debts of some $400 million, mainly owed to commercial banks. We have been seeking a country-by-country solution combining economic reform, substantial support from the IMF and World Bank and voluntary agreements between the debtors and the banks on how to deal with the outstanding debts. That strategy has made a valuable contribution to dealing with the problem of middle income debtors. We shall be looking carefully at the latest United States proposals for debt reduction in the run up to the IMF-World Bank interim committee meeting next month to which the hon. Lady referred, when we expect they will be further discussed. We have yet to see detailed proposals.
The existing debt strategy provides for voluntary debt reduction, and to that extent the United States proposals may be seen as an extension of present strategy. Our wish is that we should not transfer the responsibility for commercial debts from the banks to the taxpayers. nor should we deter commercial banks from future lending to those countries and, of course, the hon. Lady referred to the problems of moral hazard.
The aid programme is primarily about sustainable development and the alleviation of poverty. Sustainable development requires sound policies including an enhanced role for the private sector, care for the environment, both local and global, and the strengthening of local institutions to sustain what is created by donors' help. Alleviating poverty requires economic growth, and for economic growth to be politically and environmentally sustainable it requires an attack on poverty.
What do I conclude should be the key elements in our aid programme? I have already said much about our support for economic policy reform. Let me assure the House that environmental issues will be given equal prominence. I have absolutely no doubt about the importance of helping developing countries to tackle their environmental problems and to participate in the initiative to counter global and environmental damage.

Mr. Dalyell: The Department's foresters under Ron Kemp have a good international reputation and are people of the highest quality, but with all their work with the International Tropical Timber Organisation and the tropical forest action plan, and answering public inquiries and inquisitive Members of Parliament, they are really overworked. Is the Minister satisfied that he has the number of people in his Department necessary to carry out that environmental work?

Mr. Patten: It is perhaps a mild comfort that we have rather more expertise available than some other donor


agencies, but of course the hon. Gentleman raises an important point. As we attempt to do more in the forestry sector there are bound to be consequences for the expertise and manpower that we have available and we shall have to keep the issue under careful scrutiny and attention. I have no doubt about the validity of what the hon. Gentleman says but we can draw on other expertise, for example, the work of the Oxford forestry institution and other academic institutions.
We intend to use our influence in the multilateral agencies to ensure that they put greater emphasis on environmental needs in allocating their resources. We shall set an example in the way that we manage our own bilateral aid programme. Today we have published a manual for our aid programme managers on assessing environmental impact. We already do that through our forestry initiative, which was described in detail in my hon. Friend's reply to the debate on tropical rain forests earlier this week. I join others in congratulating the hon. Member for Linlithgow (Mr. Dalyell) on initiating that useful debate in the middle of the night.
I learnt first hand about the Amer-Indian perspective when I met Chief Paiakan of the Kayapo tribe before Christmas. Naturally, it is extremely important that we raise issues of forestry destruction with other states constructively in a way which makes clear our respect for their national sovereignty. Forests are not global property, even if their preservation has global significance. Undoubtedly, Brazilian Government policies have contributed to the destruction of the rain forests but there have been recent and hopeful policy reforms. We must welcome them and encourage their effective implementation while continuing to monitor the situation carefully.
The Brazilian Government regards our research project on Maraca Island as a shining example of the positive international co-operation that Brazil would welcome for saving the rain forests. To date Brazil has been wary of foreign assistance, but in recent discussions the Brazilian Government asked for further technical co-operation, possibly to assist in understanding the genetic potential of the Amazon. We are considering that request urgently. Of course our technical assistance would be only one small part of an international effort. No one has the resources to take on the Amazon single-handed.
The other dimension of any aid programme must be a concern with poverty. I have recently approved new project commitments totalling £50 million as a poverty alleviation programme in India—the Andhra Pradesh primary education project, the Orissa family welfare project and a number of agricultural projects across several states directed at the poorest groups. We are also financing a number of urban projects to deal with slum improvements in Hyderabad, Indor and Visag at a cost of some £65 million. They combine physical infrastructure improvements with work in community development, health and education. Our experience of those projects so far is encouraging and we are planning to do more.
As part of our concern with poverty we have been increasing our support for the voluntary agencies working overseas through the joint funding scheme. The voluntary agencies are particularly effective in working at the grass roots and helping local communities to help themselves. In the next financial year I am proposing to allocate £16

million for the joint funding scheme—an increase of 43 per cent. on the allocation for this year. In 1986–87 we spent less than £6 million under the joint funding scheme on non-governmental organisations. Next year we will spend at least £16 million. Those figures speak for themselves.

Mr. Anthony Steen: When the all-party parliamentary group on population and development went to India we heard that the Indian Government were grateful, as was the Family Planning Association, for all that the Government and my hon. Friend the Minister are doing. However, one of the points raised was that the money given went to the Indian Government and not all of it—in fact not much at all—was seen by the voluntary bodies, particularly the Family Planning Association, which does such important work with population control. Has the Minister thought of giving money direct to organisations such as that so that it misses out the Government conduit?

Mr. Patten: In a number of cases we give funds directly to family planning associations such as the International Planned Parenthood Federation. We also give money directly to United Nations family planning projects and to other organisations involved in family planning such as Marie Stopes International. Circumstances vary from one country to another but I shall look into that important point.
I should like to pay tribute to the work done by not only our non-governmental organisations but by our volunteer organisations. They do a superb job which justifies the increasing financial support that we have provided for them. Last year we increased our grants to the volunteer organisations by over 16 per cent. This year we have increased our grants to those organisations by over 20 per cent. and, next year, we intend once again to increase our grants to them by over 20 per cent., bringing the grants to £13 million. That is money well spent. All attempts to use the non-governmental organisations more and to put more through the volunteer organisations help to enhance the quality of our total aid programme.
Finally—not because there is not plenty more I could say but because I want to allow other hon. Members to participate in the debate—I want to deal with volume. I shall deal initially with the facts. We inherited from the previous Labour Administration—a distant and not especially sweet memory—an economy that was somewhat less than robust. Anyone who disbelieves that should consult the memoirs of those Labour politicians who have subsequently spilled the beans in order to add a little well-deserved comfort to their retirements.
From 1979 to 1982, in order to help restore our economic health, we cut public expenditure, including our spending on aid. The aid programme was held at that level until last year. During that period we saw the economy steadily expand again. The percentage of our GNP spent on aid therefore fell. In the autumn of 1987 we secured, for the first time since 1979, an increase in the aid programme.

Mr. Tom Clarke: Tell us the percentage.

Mr. Patten: I will do so in a moment.
We secured an increase in the aid programme in real terms for the following expenditure period. We turned a corner and we went on motoring in the last public spending round. The aid programme will increase by 5 per cent. in real terms in the coming year over the figure


originally planned for this year. The aid programme is starting to reflect the increased strength of the British economy and I hope that it will continue to do so.

Sir John Stanley (Tonbridge and Mailing): Will my hon. Friend say whether the 5 per cent. figure is based on the inflation forecast in the Autumn Statement or on the new inflation figures given by my right hon. Friend the Chancellor in his Budget Statement?

Mr. Patten: We have attempted to make the figure as up to date as possible. It is based on the latest GDP inflator.
In the autumn of 1987 we secured an increase and that has continued. As I have said, we look forward, after the Budget, to a 5 per cent. increase in real terms next year.
I appreciate that that is not sufficient for the Labour party—a party which when in office took us cap in hand to the IMF. It now grumbles at us—a Government who have been able to make the major contribution to the interest subsidy account of the IMF's enhanced structural adjustment facility to help today's debtors. That list of debtors, naturally, does not include the United Kingdom. It does not take a financial genius to work out that we are of more long-term assistance to developing countries as a growing economy, a major private investor in developing countries and one of the largest contributors to international debt initiatives, than as a Carey street layabout—all mouth and no pocket.
The House may be interested to learn that in the period 1984–87 total United Kingdom direct investment in developing countries exceeded that from the rest of the European Community put together. That is the mark of a strong and open economy. I shall be fair—as fair as I always am to the Labour party. The Labour party has a clear policy on aid. The Leader of the Opposition tells us that a Labour Government would increase the aid programme. In fact I should not be so reticent he said that they would double the aid programme. That is extremely generous. The rabbit comes out of the hat and £1·5 billion appears just like that.
Far be it from me to inject a note of mild partisanship into otherwise amiable proceedings. However, we are obliged by the recent spectacular political progress of the Labour party, manifested for example so explicitly in the by-election results in Glasgow, Govan, Epping Forest and Richmond, Yorks, to address its arguments with due seriousness. I shall establish three appropriately serious facts. First, not only have the Opposition promised at least £1·5 billion more on aid, they have promised, as Harry Enfield would say, "loadsamoney" on everything else. As I recall, in their previous manifesto the cost worked out at something in excess of £30 billion. I am sure that it is more than that now. I suspect that deep in the dank cellars of the Treasury under-secretaries are still counting. That promised openhandedness will come as no surprise to Lord Barnett who had to try to deal with the spectacular consequences last time round.
The second fact is that the Labour party has to answer a question that is as old as time. Where will all the money come from? The answer to that remains one of the great secrets of modern history, more unfathomable than the cracking of Enigma or the unlocking of Linear B.
The third fact is that we are pressed to give a timetable—I am delighted to satisfy the hon. Member for Monklands, West (Mr. Clarke)—for achieving the 0·7 per

cent. United Nations target. I note that there is no pressure for us to give a timetable for the 1 per cent. target for unofficial and official flows. Perhaps that is because we usually attain it. No British Governments have given such a target. I suspect that a Labour Government would make an early move towards the target. They would do so by pursuing economic policies which would rapidly bring our economy to a grinding halt. No economic growth would mean that our percentage of GNP spent on aid would increase in the short term before reality caught up with the unsustainable public expenditure plans, which is what has happened in the past.
I do not wish to be ungracious to the hon. Member for Eccles but I can make a promise to the Labour party which is based upon an argument that I believe the House largely accepts. If—it is a spartan "if'—the hon. Member for Eccles were to be given my job next month or next year, she would find herself responsible for an aid programme of as high a quality as any in the world. That is a tribute not least to the women and men who manage the programme in my Department; the women and men working in the field from Nepal to Zimbabwe, from foresters planting the Himalayas, to young and not so young volunteers spreading literacy in Tanzania or food in the war-torn Horn of Africa. It should be beyond party argument that we have a good aid programme. If we cannot agree on volume and other matters, we should at least be able to agree on that.

Mr. David Alton: The Minister and the hon. Member for Eccles (Miss Lestor) have talked much about debt. The House is in the debt of the hon. Member for Eccles for introducing the motion and giving us a chance to have this important debate. The House is also in the debt of the Minister, who discharges his duties with his customary relish. No one can doubt his commitment to his portfolio. Although some of us disagree with the arguments he advanced, especially about volume, his compassion and commitment are not in doubt, and all hon. Members are grateful to him for that.
We are especially grateful for the Minister's announcement this morning of additional aid for Ghana and Kenya and for his promise that evironmental issues will achieve much prominence in the future. Further, his announce-ment of additional help for the non-governmental organisations was welcome.
The debate, which is being held in Budget week and the aftermath of the successful conference held in London on the need for more international action to protect the ozone layer, is as topical as it is welcome. At the heart of the debate are two principal issues—the scale of our contribution, and our effectiveness, together with other nations, in co-ordinating the responses that we make to the developing world.
The hon. Member for Eccles rightly concentrated her fire on the issue of debt. Three days ago, the Chancellor of the Exchequer also made a speech about debt. In his Budget address, the Chancellor told us that in 1989–90 he had budgeted for repayment of our national debt to the tune of £14 billion—3 per cent. of gross domestic product. He said that as a proportion of GDP, Government debt was now lower than at any time since world war one, and that net debt interest costs would be lower by £1·5 billion this year because of reduced repayments on loan charges.


The scale of those repayments is bigger than our aid programme this year. In justification of this financial policy, with which many hon. Members agree, the Chancellor said that the savings could be put to good use. Many hon. Members waited to hear by how much our overseas aid programme would increase, but we waited in vain. What a cruel contrast there is between our attitude to domestic debt and the usurous levels of debt and interest charges that cripple many underdeveloped countries.
The accelerated growth of international debt provides a graphic illustration of the parable of the unforgiving debtor. Many of the debts were amassed in the 1960s and 1970s, when conventional wisdom held that countries could not go bankrupt. Commercial banks in the developed world gave out money with the alacrity of a three-armed man. The sequel is well known—countries went bankrupt; they defaulted on debts; the banks rescheduled debts and interest rates soared. Third world countries have subsequently been forced to generate exports by selling raw materials and plundering their natural assets to pay Shylock and service interest on their debts.
As the Minister said, Third world debt has been estimated at more than $1,000 billion. Despite the lead of some of our banks and the Government in writing off past debts, too few countries have followed.
Last October, the Minister said:
An effective aid programme is one that stops babies dying.
He must know that the conditions that the International Monetary Fund imposes on debtors tend to place burdens disproportionately on the poor. Financial austerity leads to cuts in already minimal health and welfare services and in food subsidies, which leads to hunger and babies dying.
Julius Nyerere complained bitterly of the IMF. He said:
They asked me to make a choice between paying the debts of Tanzania and feeding the people of Tanzania. For me, that is no moral choice; it is not even a practical choice.
The debt crisis is a time bomb waiting to explode. Unless we insist on the rescheduling and cancellation of debt, it will cause immense suffering for the poor of the Third world. If, as the Chancellor argued on Tuesday, the repayment of debt, at a time of inflation and high interest rates, is prudent for Great Britain, it would seem reasonable to urge the Government to favour an identical approach to the developing world.
It is worth comparing our budgeted £14 billion debt repayment with our total allocated aid programme of £1·4 billion for 1988–89, which will increase to £1·5 billion next year. It would be churlish not to welcome this modest increase, but the House must put it in perspective. Over the past decade, until 1987, the value of Britain's aid fell by over 36 per cent. Even in ravaged, hungry Africa—for which the Minister said there would be additional help, and where babies have been dying in their thousands—there was a decrease in real terms in Britain's aid from £386 million in 1979 to £284 million in 1987. Yet the contrast between the northern and southern regions of our planet has never been more marked, and, for many of us, more intolerable.
In 1970, by United Nations resolution 2626, we committed ourselves to meeting the target figure of 0·7 per cent. of gross national product in overseas aid. When the Government took office in 1979, we gave 0·5 per cent. and

were sixth in the league table of the 18 western aid givers. Today, we are 14th. In 1983, the Prime Minister promised that we would move to the 0·7 per cent. target "when economic circumstances permit". Last month, she boasted:
We now have a higher standard of living than we have ever known. We have a great budget surplus."—[Official Report,28 February 1989; Vol. 148, c. 154–155.]
On Tuesday, the Chancellor said that over the past 10 years our economy had been transformed by a dramatic and sustained improvement. He said:
For the economy as a whole, our productivity growth has been second only to that of Japan…We have seen a dramatic and long overdue improvement in company profits".—[Official Report, 14 March 1989; Vol. 149, c.294.]
However, there has not been a corresponding increase in overseas aid. Why are we lagging behind Japan, Italy, Germany, Canada and France? When will "economic circumstances" permit an improvement in our giving?
By contrast with our aid programme, we will find 10 times as much this year to pay off domestic debt, and almost 18 times as much for armaments. Even as far back as 1985, worldwide military expenditure topped £500 billion—almost £1 million a minute. Five hours of world military spending on that scale is equivalent to UNICEF's total annual budget.
The Minister talked about the success of our multilateral aid programme. However, our bilateral aid programme bears scrutiny and tells a different story. According to the public expenditure White Paper published in January, in 1987 the United Kingdom provided £594 million to over 120 countries in bilateral aid. Some 50 per cent. of that went to 10 countries, so India, Bangladesh, Tanzania, Kenya, Ghana, Pakistan, Sudan, Malawi, Zambia, and Mozambique received an average of just under £50 million each. The remaining 110 countries divided £247 million among them, which is an average of £2·2 million each. The department that supervises parks, gardens and other community facilities in Liverpool will this year spend £24.5 million, which is 12 times as much as we shall give to any one of those 110 countries.
A couple of years ago, I visited Nepal, which is the fourth poorest country in the world and where the average annual income is £120. Adult illiteracy is about 78 per cent. In that context, our aid programme is pitiful. We in the affluent countries should call to mind the story of Lazarus and Dives. So often we are like Dives, refusing to give even the crumbs off our table. If we are to avoid the fate of Dives, we should, first, increase our aid budget by 20 per cent. in real terms each year until it reaches 0·7 per cent. of gross national product. Secondly, there should be a greatly increased programme of long-term aid. Thirdly, there should be a substantial reserve sum to provide prompt and generous aid in emergencies. Fourthly, there should be a detailed plan for adequate food aid in times of famine. Fifthly, there should be a detailed plan for the remission of the official and commercial debts of the poorest countries. Sixthly, there should be a comprehensive plan for improvement in terms and conditions of trade for the poorest countries.
Perhaps in line with Government thinking, we should also encourage the Minister in what he called last year:
a pretty fundamental review of the working relationship between government and charities.
If the Government want to cut taxes, let them give more substantial tax breaks and incentives to those who are


happy to donate and let them give more support to voluntary organisations. For in that respect also, the Government are currently falling behind other countries. Last year, the United Kingdom gave 0·7 per cent.—ironically—of official aid to voluntary organisations, compared with 1·6 per cent. in Japan, 11·1 per cent. in the United States and an average of 5·3 per cent. among all the 18 OECD countries. Clearly, the work of voluntary organisations and individuals must be encouraged and must he dovetailed with Government action.
I said that our aid programme would be judged by its generosity and effectiveness. It will become more effective only when it is better co-ordinated with the programmes of other donor countries. It must be targeted to meet the global challenge of a broken and environmentally degraded world. The story is the same, whether it be the floods in Bangladesh caused by deforestation of the Himalayas or threats to the survival of Amazonian Indians through the reckless consumption of the rain forests, ozone or acid rain.
In 1980, the World Wildlife Fund, the United Nations environment programme and the International Union for the Conservation of Nature and Natural Resources, published their world conservation strategy. They argued that man was just a part of the ecological order, not its master, and that we lacked a sense of responsibility in caring for creation. In the developing countries, the situation is disastrous. The deserts of the world are now expanding by 60,000 sq km annually—almost the size of Ireland. Poor land management and deforestation lead to the annual loss of 6,000 million tonnes of top soil in India alone. Fuel wood is so scarce in the poorer parts of the Andean sierra and the African Sahel that the cost of clothing and heating can constitute one quarter of a family's budget. Every minute, 20 hectares of tropical rain forest are destroyed, although the rain forests are the most important ecosystem on the globe. The area of productive forest will be halved during the 1980s and 1990s. Twentyfive thousand plant species and 1,000 species and sub-species of mammals, birds, amphibians, reptiles and fish face extinction. The bulldozers and chainsaws hack down the forests, the aircraft spray their defoliants, the factory ships ruthlessly deplete fish stocks and the prospectors extract minerals while destroying flora, fauna and anything else that stands in the way. Yet we have the neck to call that progress. It is the selfish plunder of creation and instead of unsustainable growth we need good stewardship and the responsible husbandry of irreplaceable gifts. The Government should ensure that our aid goes into environmentally desirable projects and that the pressures that lead to wanton destruction are removed.
In biblical times, people favoured the proclamation of a year of jubilee when captives would be freed, fields would lie fallow so that they could regain their goodness, and unjust debts would be removed from those who could not pay them. Perhaps the Minister should persuade his colleagues to proclaim a contemporary year of jubilee.
I want to commend to the Minister the story of two pre-Raphaelite painters, Rossetti and Morris. Whenever Rossetti saw a beggar, he would empty out his pockets and give the beggar everything in them. He would walk away and never think about the beggar again. Morris would never give a penny, but he went off to work for a world in which there would be no more beggars. Rossetti was all

heart and Morris was all head. The Government need to be a combination of heart and head. I commend the motion to the House.

Sir John Stanley (Tonbridge and Malting): I want to join my hon. Friend the Minister in congratulating the hon. Member for Eccles (Miss Lestor) on her private enterprise—if she is prepared to be associated with that phrase—in securing this debate and giving us the opportunity of nearly a full day on this important subject. I want to start where my hon. Friend the Minister finished—with the issue of expenditure. Having been privileged to sit on the Government Front Bench for over nine of the past 10 years, I fully accept my share of the collective responsibility for what happened to the aid programme over that period. However, whatever comments may be made about the economy and the state of the gross national product when we came to office in May 1979, I am unhappy that the aid programme in volume is so much lower in real terms than it was in 1979. I also find it regrettable that even at the end of the current three-year public expenditure period, the end of the financial year 1991–92, the aid programme, on present figures, will still be significantly lower than it was when we came into office in May 1979. The uncomfortable reality is that over that decade, we have chosen as a matter of policy not to increase expenditure on overseas aid as our economy has expanded. In the process, we have a sharply declining share in overseas aid expressed as a proportion of GNP.
My hon. Friend is perfectly right to point out that the economy was in bad shape when we came to office in May 1979, but I hope that we can look less at the position of the Labour Government and more at what is done by other comparable countries. I appeciate my hon. Friend's difficulty in saying so at the Dispatch Box, but he cannot be especially happy that when one looks at other comparable countries, not least in western Europe, the amount spent on official aid, as a proportion of GNP, is so much lower in this country than it is in almost all comparable countries. We now spend a significantly lower proportion of GNP on aid than France, Germany, Italy, Belgium and the Netherlands. The proportion is lower than it is in Norway, Sweden and Finland, the major Scandinavian countries. It is even lower than it is in Japan, notwithstanding the enormous size of Japan's GNP and the fact that Japan is a latecomer in overseas aid. I hope that when my hon. Friend comes to the next public expenditure round, he will do what I am certain he has been doing in successive public expenditure rounds and seek to obtain a somewhat larger increase in real terms in the growth of our overseas aid programme, so that we can at least reverse the decline in our aid programme as a proportion of GNP.
My hon. Friend reasonably refers to the quality of our aid programme and I endorse that. Like every other hon. Member, I have travelled in various parts of the world and I have no doubt that the quality of staff in my hon. Friend's Department, both those at home and those serving overseas, is extremely good. The quality of the members of staff in governmental organisations at some arm's length from Government, such as the Commonwealth Development Corporation and the British Council, is high. I fully endorse what my hon. Friend said about the quality of our non-governmental


organisations and our volunteer organisations, by which we are better served than any other country. They are probably the best in the world. I am sure that my hon. Friend the Minister would be the first to agree, however, that quality is no substitute for quantum, especially when the needs are so evident and so clearly demand urgent attention. One cannot ignore the quantum element, no matter how good the quality may be.
My hon. Friend referred to the welcome increase in real terms in our overseas aid programme. Even more recently than in the Autumn Statement, in which an 18 per cent. increase in cash terms was announced, to be spread over the next three years, my hon. Friend has announced additional elements in the aid programme. I was delighted to hear him talk of a 5 per cent. increase in real terms in the next financial year, 1989–90, although I, for one, will certainly want to press him further to find out exactly what GDP deflator assumption has been used in arriving at that figure. I hope that it approximates closely to the figure that the Treasury is now using as the updated rate of inflation for the next financial year. In other words, I hope that there will be a genuine increase of 5 per cent. in the forthcoming year. I hope, too, that my hon. Friend will be able to achieve similar increases over the next two years as part of the public expenditure planning process, although I appreciate that we shall have to await the appropriate public expenditure rounds.
Unless we can achieve real terms increases of 5 per cent. or more in the aid programme, there is no way that we shall reverse the trend in the size of our aid programme as a proportion of GNP in the next three years. There is a danger that it could decline still further. I hope that the Minister and the Government will be anxious to increase the 0·28 per cent. of GNP to which our aid programme has now fallen.
Human needs are as critical and acute in the Sudan as they are in any other country. As the House knows, over the past few years the people of Sudan—particularly the people of southern Sudan—have had to contend with the appalling vagaries of a climate that oscillates between drought and flood, superimposed on a horrendous and brutally cruel civil war. One of the most graphic and moving television programmes that I have seen in recent years was that produced by the BBC "Everyman" team about a month ago, which was devoted to bring home to us the extent of the suffering of ordinary people in the southern Sudan as a result of the ravages of civil war and climatic horrors. The House will want to congratulate the "Everyman" team, who were no doubt exposed to not insignificant personal danger.
In that programme we saw the appalling way in which displaced rural communities in some parts of the country have been driven by civil war into the more sheltered urban areas but reduced to living in appalling shanty towns and to trying to eke out an existence for themselves by clawing their way over municipal rubbish tips on the outskirts of Khartoum. Having visited Mekele hospital during the Ethiopian famine, I was struck vividly by the footage of the Juba hospital in the southern Sudan. Food had almost run out, the one X-ray machine had broken down beyond repair and general anaesthetic was no longer available. We saw film of a man who was fully conscious during major abdominal surgery for a hernia. In the absence of general

anaesthetic, he was being operated on under local anaesthetic. What is the Minister's Department doing to provide emergency relief and development aid to meet the urgent needs of the Sudan?
Can my hon. Friend also bring us up to date with what is happening in Afghanistan? I welcome his prompt initiative in announcing £500,000 of emergency aid to Afghanistan to be administered through the Red Cross and UNICEF. Can he tell us whether that aid is reaching Kabul successfully and whether the Red Cross and UNICEF could use a greater sum than has been made available so far?
Trade policy relates closely to overseas aid. As the Minister has said on many occasions, a liberal trade policy is every bit as important to Third world countries as the quantum and quality of our aid programme. But the trend in trade policy seems to be tending away from liberalism, with potentially serious consequences for developing countries. I was particularly struck by a short piece in a very good speech made by my right hon. Friend the Chancellor on 6 December at the all-party overseas aid group conference on debt. He said:
Although many developing countries still protect their trade heavily, a recent IMF study showed that, among the developing countries, liberalising changes outnumbered restrictive changes by nearly 2 to 1 last year. Unfortunately, in the industrialised world, protectionist moves, of one kind or another, including voluntary restraint arrangements and unjustified anti-dumping duties, were in the majority.
World Bank figures suggest that protection by industrialised countries costs the developing countries more than twice the amount of official development aid they receive.
It makes a mockery of our aid programme, and the aid programmes of industrialised countries generally, if we are taking more away from the developing countries through protectionist trade policies than we are giving them in aid. It is vital that all those concerned with aid policy should focus their attention closely on the details of trade relations round the world. I have two questions for my hon. Friend on that. First, how major a role does his Department play in the detail of trade policy? I am talking not about the general policy of trying to liberalise trade but about the specifics. For example, does his Department go into detail on the United Kingdom's position on EEC directives such as the directive against the dumping of tropical fruit, which can be critical to some Third world countries? I hope that my hon. Friend can assure us that these matters are not being left to the Department of Trade and Industry, still less the Ministry of Agriculture, Fisheries and Food, whose interests and reflexes in this matter are likely to be protectionist.

Mr. Chris Patten: As my right hon. Friend will know, we are currently in the middle of the renegotiation of the Lome convention. We are at least at the end of the beginning, if not at the beginning of the end. We are one of the few countries represented by an aid Minister in negotiating an agreement which is about trade just as much as it is about aid. That is an indication of our fairly central role in trade matters as they affect developing countries. We also represent the United Kingdom in the Food and Agriculture Organisation. Across the board, we are pretty well plugged into the issues which my right hon. Friend quite properly says are of fundamental importance.

Sir John Stanley: I am grateful for my hon. Friend's encouraging response. I hope that he will mark the European Community with extreme closeness. Of the


regular lists of draft EEC directives that are sent to hon. Members, a considerable volume appear to have a protectionist slant against Third world countries' interests.
What should be the key focus of priorities for the aid programme? My hon. Friend has done a great deal to ensure that the aid programme is properly given an order of priority. I welcome what he has done to focus the aid programme on the poorest countries, and I particularly welcome what he has done to assist countries in sub-Saharan Africa. We cannot look only at the poorest countries. We must go beyond them and look equally closely at the poorest people in the poorest countries.
I fully understand the attractions, from a national economic and industrial standpoint, of major programme aid projects and major infrastructure projects which, according to the policy that we have followed for a long time, will be tied to the purchase of British goods and services and, therefore, will be good for British exports. However, we must be careful that we do not allow the aid programme to become unbalanced and unduly unfocused as a means of providing what is tantamount to an export subsidy for British providers of goods and services. First and foremost, we must focus on the poorest people in the poorest countries.
I was struck by my hon. Friend's answer on 23 February in reply to a question that I had put to him on the rate of calorie consumption in the poorest countries. His answer showed that, in African countries south of the Sahara, there are now 27 countries in which the average—I stress that it is an average; there are plenty of people below the average—daily calorie intake is below the minimum level necessary to maintain health.
We must focus on those people in such a desperate plight—people whose health, day by day, month by month, and year by year is degenerating through an inadequate supply of calories. I hope that my hon. Friend will be able to say whether he is able to do any more to focus the aid programme on the key elements of food and water provision and of dealing with disease. Ultimately, that is the biggest and most compelling justification for the whole aid programme.
In his ministerial role, my hon. Friend has done an outstanding job in the effective, able and caring way in which he has discharged his responsibilities with the resources that he has been given. Many hon. Members wish him well in trying to secure some more resources to deal with the urgent human needs in Third world countries.

Mr. Tom Clarke: I apologise to you, Mr. Deputy Speaker, to my hon. Friend the Member for Eccles (Miss Lestor), to the Minister and to the House, as I will soon have to leave to catch a plane to Glasgow. I shall read the winding-up speeches with great interest.
Like other hon. Members, I was delighted that my hon. Friend was successful in the ballot and that she chose this subject for her excellent motion. The House has rightly given much time to the crucial issue of debt. My hon. Friend clearly analysed the problem and offered certain prescriptions. To be fair, the Minister applied himself to some of the points that were raised, but he did not find much time to deal with an issue which is of great concern to many hon. Members and to people elsewhere. Although the Minister said that the Government have been and will

remain prominent in debt initiatives, I was a little disappointed that he did not find an opportunity to talk about the Brady debt plan which was launched in the United States last Friday. He may have something to say about that when he replies.

Mr. Chris Patten: I do not blame the hon. Gentleman. I am sure that I was being spectacularly boring. The hon. Gentleman's attention must have flagged when I referred to the American proposals and the Brady initiative. As the hon. Member for Eccles (Miss Lestor) said, I said that we expect those American proposals to be discussed in greater detail at interim meetings of the International Monetary Fund and the World Bank next month.

Mr. Clarke: I shall read the Minister's speech with great interest. I do not recall that he used the word "Brady" or specifically referred to the Brady proposals. Opposition members would welcome his saying a little more about the proposals and about what was said last Friday, in particular what Mr. Brady himself said about the role of developing countries, and especially Japan, in trying to get a solution to the problem. The Minister said that we had conferred closely with Japan and other industrial countries in order to begin to lay the basis for a common approach to the debt problem by creditor countries. He was also fair enough to add that, in recent years, we had seen positive growth occur in many debtor nations and that last year six major debtor nations realised more than 4 per cent. positive growth. He said that that was primarily due to the debtors' own efforts.
It is not a particularly radical start, any more than the Baker plan was, but it is a recognition that the new Administration regards the problem as difficult. We look forward to hearing the Government's response.
We are told that the Brady initiative has been dramatised by the riots that left more than 250 people dead in Venezuela. Much of that arose because of the wealth imbalance in Latin America. There is an uneven distribution of income. In Brazil, the richest fifth of the population takes 86 per cent. of the total income. That is clearly a recipe for chaos and frustration. The Minister talked about the moral hazard, but it can also apply in this context. When there is inequality and an uneven spread of wealth, and poverty and malnutrition exist in the circumstances which hon. Members have debated, frustrations will arise.
I refer to the crucial issue that was raised during the debate and to which the Minister promised to address himself—the United Nations target of 0·7 per cent. I was extremely sorry that, despite the flagging in the earlier parts of the Minister's speech, he did not actually make any commitment. I was particularly disappointed in view of the exchangesin the House over the past month—indeed, year—because they gave us every reason to believe that, after the Budget, some commitment would be made.
The Government have had 10 years in which to tell us their strategy, but we are none the wiser. The Minister said that the former Labour Government did not make such a commitment but it is only fair that I should remind him that when Dame Judith Hart left office, the figure for overseas aid had reached 0·59 per cent. of GNP. Now, despite promptings from the Opposition, the figure is a disgraceful 0·28 per cent. This is at a time when the Minister—we also heard this from the Chancellor and other Ministers during the week—admittedthat the GNP


had grown. In those circumstances, it is quite indefensible for Ministers to crow that the national cake has grown and at the same time to say that this will not be reflected in the money that they are prepared to give to the poorest of the poor in the rest of the world.

Mr. Jeremy Corbyn: My hon. Friend must be aware of the words used by the Chancellor on Tuesday, when he said that, this year, the Government expect to make a surplus of £14 billion—part of which will be used to pay off the national debt. In those circumstances, would it not be more appropriate and beneficial to the rest of the world if more money were given for overseas aid and to assist the very poor countries in the usary levels of debt repayments that they are forced into at present?

Mr. Clarke: My hon. Friend makes a very good point. Time after time, we are told from the Dispatch Box that the Government are dealing with taxpayers' money. If that is the case, we would expect the Government to bear in mind the overwhelming view of taxpayers on overseas aid. Every test has shown that taxpayers feel that the Government should be more generous. The last opinion poll showed that 76 per cent. of people in this country thought that we should be giving as much as we do now, or more.
When the Minister talks about inflation and what happened—as he saw it—10 years ago, he seems to forget that overseas aid is not inflationary. By definition, it goes overseas. In spite of his very complacent speech this morning, I hope that if he met the Chancellor or the Chief Secretary to the Treasury, he would argue that we should do something that will be seen internationally to be decent, responsible and right, without adding to the problems of inflation.
It is not good enough that the United Kingdom is now placed 14th out of the 17 countries in the OECD league table. In 1979, when we were seventh and our contribution was increasing, Dame Judith Hart said that we were set to do better still. Of the 17 members of the OECD's development assistance committee, the Government's fall in contribution is by far the largest and should be contrasted with the 300 per cent. increase in the proportion of GNP that is given by Italy, the 138 per cent. increase given by Finland and the 43 per cent. given by Sweden. There have been other increases from countries such as Denmark, Norway, Japan, Holland and even the United States. Most of those countries find no difficulty in accepting that, apart from aiming at the United Nations target, if GNP increases, it is not unreasonable to make an improved contribution to the Third world.
The Minister and other hon. Members referred to Comic Relief, which showed that the British people are, by nature, generous and not mean, parsimonious or selfish. I do not believe that their aspirations are reflected in the policies pursued by the Government. The television programme gave some of the views of the British people and some of the consequences of lethargy. For example, Billy Connolly's contribution dealing with Mozambique is worthy of consideration.
I hope that the Minister will recall that Billy Connolly talked not just about overseas aid or targeting—about which we hear from the Government in another context

—but about how our objective of trying to remove poverty overseas is undermined, particularly in Mozambique, by South African aggression. We were shown examples of that and the British people were appalled. We saw some of the activities of the South African guerrillas, which undermine the beneficial effects of British aid. In Mozambique, we want to address the problems of poverty, malnutrition and environmental imperfections faced by the desperately poor people. It is not enough simply to contribute—we should contribute more—if the Government do not even have the courage to tell the South Africans that this element of destabilisation in Mozambique is wholly unacceptable.
The Minister spoke about moral hazards. There is no greater moral hazard than to do what he did this morning when he wrapped up a poor policy in terms of complacency—which is being spread about the House like confetti, although happily it is not shared by the British people or the 10,000 who supported the Brandt report and lobbied Parliament. Therefore, despite the fact that this is a Friday debate and overseas aid, as my hon. Friend the Member for Eccles said, is not allocated much time, the Minister can be assured that many of us will return to the subject until we are sure that the British contribution to the United Nations figure is something of which we can be proud. Today, we are far from proud.

Mr. Robert Rhodes James: In following the hon. Gentleman for Monklands, West (Mr. Clarke) I shall make the brief point that I was at the United Nations when the figure of 0–7 per cent. was plucked out of thin air. I would have thought that the volume of aid rather than the proportion should be emphasised.
It is nine years since I had the good fortune—as the hon. Member for Eccles (Miss Lestor) has had today—of winning the private Members' ballot. I was then able to introduce a debate on the Brandt Commission report. It is unfortunate that we have to depend on the luck of the private Members' ballot to be able to discuss such important matters.
I was deeply impressed by the speeches by my right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley) and of the hon. Member for Liverpool, Mossley Hill (Mr. Alton)—not least because they both emphasised the remarkable contribution of my hon. Friend the Minister since he has been at the Overseas Development Administration. As a former very junior member of the ODA, that gave me particular pleasure.
Another matter which gives me pleasure and which it is important to emphasise is the United Nations revival after its ten lost Waldheim years. The performance of my friend and former colleague Perez de Cuellar, in bringing that organisation back into the forefront—where it should always have been—was a remarkable personal achievement.
One of the greatest achievements of the United Nations was the world wide elimination of smallpox, which was not just a technical matter but one of political will by every single country in the world. Speaking as a former chairman of the "Stop Polio Campaign" of the Save the Children Fund, I know that we can do the same with other diseases. We do not have the answer for all of them—malaria is the most conspicuous example and, obviously, AIDS. However, we know all about immunising people


against other diseases—and we have the technique and the facilities to do so. What we require, is the global political will because, for all its faults, the United Nations is the only such global organisation.
Recently I was reflecting on the new interest in and excitement about environmental matters. At one time I was a senior adviser to the United Nations on such matters. I was part author of the 1972 Stockholm conference report. We were years ahead of our time, but we underestimated national selfishness in almost every country. We also underestimated greed and the willingness to destroy the environment.
On a slightly peripheral point, I have at times been a lone voice in the Conservative party urging the need for basic non-commercial research. A classic example of its value was the British Antarctic survey, the headquarters of which are in my constituency and which discovered the gap in the ozone layer. That major development would not have happened if all research were—as we are often told it must be—commercial, market oriented and so on.
I want to refer to southern Africa and the frontline states, which my right hon. Friend the Prime Minister will shortly be visiting. The record of the British Government in this area in recent years has been excellent, and their help is far more appreciated than is generally realised. When I was in Harare last March and held a long discussion with President Mugabe, it was clear to me that the Zimbabwe Government were highly appreciative of what we are doing. We have spent more than £1 billion on the south African development co-ordination conference countries since 1980—a formidable sum. Now, for the first time, there are hopeful signs that at long last Namibia will gain its independence. The House knows of my deep personal interest and involvement in that.
My delight at recent developments has been overshadowed by the tragic death of Bernt Carlsson in the Lockerbie air disaster. He was the high commissioner for Namibia and was flying to New York to sign the final document in the long saga with Pik Botha.
Three things are essential for Namibia even before independence and certainly after it. The first is the need for good advice and assistance with agriculture. Namibia is a vast country with a very small population. I am not an agronomist, but it seems to me that a country with that many trees must have water and therefore possibilities. I should have thought that some of my Israeli friends, with their experience, could be of real assistance in this respect.
Secondly, there is the problem of health. I was one of the last people allowed to go to the war zone in Namibia—a fraught experience. I went with the hon. Member for Swansea, East (Mr. Anderson). One of the Catholic hospitals that we visited did not even have bandages, let alone drugs and medicines. Faced with poverty like that—it was as bad as any I had experienced in my childhood in India—one recognises what must and can be done at no vast expense.
The third aspect is education. Generations of a deliberate policy of depriving black children of education must be reversed. That will be a long-term project to which this country can make a positive contribution, given the good will that we have. Our reputation stands high in Namibia because our Governments of both parties have consistently supported resolution 435 and the Namibian people

Mr. Tam Dalyell: I commend the speech made by the hon. Member for Cambridge (Mr. Rhodes
It is true that on Tuesday morning beginning at column 157 I occupied 38 minutes of the House's time, and I am sure that there will be considered replies on the rain forest point from the Government to my speech.
I want to make one emotional point. I have never forgotten going to the Amerindians in Altamira and being asked by Pa-akan what people living on top of high buildings and skyscrapers know about them and their forests—a difficult question to answer. It is central to much of the problem that Brazil faces.
The Minister said that forests are not global property, which is true, and we must be careful about interfering in the preserves that the Brazilian Government understandably think are theirs. As I said in my speech on the Consolidated Fund, they are people of the highest quality. However, policy towards the forests has global consequences, and I am glad to see the Minister nodding agreement to that.
Never in my public or private life have I been so concerned or frightened as I was by the information that became clearer to me during my visit to Amazonia at the invitation of Friends of the Earth. In case of misunderstanding, let me make it clear that in no way am I financially beholden to Friends of the Earth or anyone else.
I am concerned about my constituents. We live on the European equivalent of the north coast of Labrador and if we are not careful we shall have the climate of the north coast of Labrador. I hope the House will acquit me of the charge of being an eco-nut. For more than 22 years successive editors of the New Scientisthave had confidence in my work as a weekly columnist. Had my scientific judgments been in any way far-fetched I would not have lasted a couple of weeks in that postion. What I say, I say with considerable care and after considerable thought.
If we are not extremely careful about climatological flip, we face the prospect and dangers of another ice age. The Minister knows the argument: I know that he takes it seriously, as did the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs who answered my nocturnal debate on Monday. I am more concerned about the seriousness with which some Department of Trade and Industry Ministers approached the subject yesterday—although I may be doing the hon. Member for South Ribble (Mr. Atkins) an injustice.
My concern is this: for tens of thousands of years the rains have come in from the Atlantic brought by winds from the east. They have come into north-east Brazil to the Amazon delta and the state of Para. In the past five years—minuscule in real time, still less in geological time—things have changed.
The one thing I suspect this Minister and hon. Members may not fully understand—I did not until I went there—is the sheer stark scale of the destruction. For kilometre after kilometre, going up the Xingu river—I have photographs of this, although this is not the place for a slide—lecture one sees the stumps of charred mahogany and brazil nut trees which are useless, deprived of their ecosystems. By Brazilian law they cannot be cut down. They are gaunt, stark, sad lacework figures, about to die.
The Kayapo indians believe that trees have spirits and those spirits are being killed and that insults their forefathers. I am no animist, but I understand and respect the feelings behind that view. There are swamps in places where there were no swamps before and those swamps are good only for mosquitoes. I do not want to be personal, but when I went to get my injections at the tropical diseases hospital, the person doing the injections said to me, "Do you realise that you are going to the most unhealthy place on the face of the planet?" That was the opinion of the hospital.
The reason for such a belief is obvious. With all the swamps and mosquitoes the changes in the forests' ecosystems are obvious. Perhaps the change is no more strongly exemplified than in the presence of blue skies when there should normally have been clouds. I went out into what should have been the rainy season when there should have been heavy afternoon rainfalls. There were but a few drops at most and only a few clouds. I was told that in the past there would have been heavy clouds and rain.
That change has taken place in a very short space of time. The problem is cut-off of the moisture line. If the forests in eastern Amazonia continue to be cut down and burned at the present rate, cloud formations will not occur. If that happens because of tree removal, the vapours and moisture will simply not form. I do not want to give the House a lesson in physics, but that is classic desertification. Moisture will not form and if moisture does not form over that crucial area of land on the eastern coast of South America, the hop-scotch effect, the transfer of moisture up and down and the process of evapotransporation will not take place across central Amazonia.
There are three consequences if that happens. First, the dry season will be longer and there will be more felling. Cattle ranchers will find that the land on which they have their miserable cattle will last only one or two years and they will want more as a result. They will be ever greedier to fell more virgin forest and burn it.
Secondly, inevitably, there will be larger, more extensive and more uncontrollable forest fires. The extent of the fire destruction can only really be revealed by NASA's satellite pictures. I hope that the Foreign and Commonwealth Office will receive NASA's information about the extent of the burning. People talk about the destruction involving areas the size of France, although it may be greater than that. That destruction will inevitably take place if there is no rainfall.
Thirdly, botanists have told me that if the ancient eco-system of the central Amazon is deprived of rain for three or four weeks, many plants in that botanical diversity would wither. Those plants need rain. The Minister must know about that and I hope that he will get expert advice from Dr. Phrance at Kew and from others about that, and tell me if I exaggerate.
May we consider now the selfish, north-European British point of view. If everything that I have described happens, Jose Lutzenberger and others who claim to understand these matters have told me that the air currents and the hop-scotch moisture process across central Amazonia and across provinces like Acre and western Amazonia, will no longer, to use a very lose term, "bang"

against the high Andes, and the air currents we take for granted will not be formed. If they are not formed, they will not move easterly, eventually paralleling the Gulf stream. If they do not parallel the Gulf stream, we shall be in the greatest difficulty because the Gulf stream and those air currents from a generally south westerly direction give northern Europeans a different climate from those who dwell on the north coast of Labrador.
Our excellent physicist-ambassador in Brasilia, Michael Newington, told me very gently, "You don't know about all this." I am very pleased that one of our ambassadors is a physicist. However, as Michael Newington conceded, no one else knows for certain about it either. We had better find out because it is incontrovertible that the stakes are simply stupendous.
If anyone asks why we should be so concerned about the Amazonian forest, the answer is that we must consider the possible prospect of a climatalogical flip. We must consider the possibility of London, Hamburg and other great cities experiencing a complete change of weather. That would absolutely change life on our continent as we have known it.
It is a matter of the greatest priority that research should be directed to discover what would happen if there is any more destruction of the Brazilian forests and I emphasise the term "Brazilian" because they understand that I recognise their sovereignty over the forest. None of us can be sure of the viability of a great forest. Does there come a point when the whole eco-system is no longer viable?

Mr. Holland: Yes.

Mr. Dalyell: My hon. Friend the Member for Vauxhall (Mr. Holland) agrees with me. I do not want to be alarmist or sensational. I am not searching for a headline. This is the speech of a desperately worried individual who has had this experience and who thinks that life as we have known it, the whole life support system of the planet, could be in danger.
I want to reflect on a creepy subject. How did the mammoth ever become encapsulated in ice? The mammoth was not a tundra-eating animal. An examination of a mammoth's stomach contents showed that it had eaten ferns and plants, if not of a tropical type, of at least a temperate type. No tundra was found in its stomach. If the ice age had occurred over a long perod of time, would not the mammoths have drifted south? Why should they suddenly have become caught in the ice? Every indication—geological and otherwise—is that the ice age came very quickly and very unexpectedly on the animal kingdom. I do not want to be alarmist or to exaggerate, but I ask for a comment by the Minister on the proposition that there is the very greatest danger in destroying the Brazilian rain forest and rain forests in general. We have seen what happened to sub-Saharan Africa, mentioned by my hon. Friend the Member for Eccles (Miss Lestor), to whom we are indebted for this debate.
Will there be some kind of urgent Government consideration given to this topic, about which many serious people are desperately anxious? I speak with the greatest anxiety and concern that I have ever done in my public life.

12 noon

Sir Charles Morrison: It is essential to alert more and more people to environmental threats. It strikes me that the United Kingdom is awakening, but that much of the world is still unaware of them. The hon. Member for Linlithgow (Mr. Dalyell) once again does a service by drawing our attention to the consequences of the destruction of the Brazilian rain forest. I shall make some remarks implicitly about the cause of that destruction—rather more in Asia than in Latin America, but the consequences are the same. I congratulate the hon. Member for Eccles (Miss Lestor) on her good fortune in the ballot and on selecting overseas aid and development as the subject of the debate. Not unnaturally, most of the emphasis has been on debt, debt repayment and aid targets. Although United Nations targets are of importance, I personally, regard them more as guidelines than as immediate objectives. I am more concerned about the quality and type of aid than I am about the amount—though as my right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley) pointed out, however much emphasis one places on quality, one must take account also of quantum.
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I am more concerned about quality for a variety of reasons. One technical adviser may be worth 20 or 30 times his cost simply on the basis of the old argument: "Give a man a fish, and you feed him for one day; teach him to fish, and you feed him for life." But whatever may be the targets., and whatever money may be available, aid is only a drop in the ocean compared with need.
That said, the Government's record is fairly respectable. We have been reminded that this year and for the next four years there will be a real increase in aid amounting to about 5 per cent. in real terms. That is a considerable achievement after the regrettable, albeit necessary, cutbacks in the early 1980s. Furthermore, to exceed the United Nations' target for official and private aid combined in all but two years since 1979 is also a considerable achievement. It is particularly noteworthy that 80 per cent. of our aid goes to the very poorest countries compared with only 60 per cent. from the west as a whole. That is not bad, but I shall concentrate most of my remarks on an area where much more aid, education and advice is needed.
Aid should be provided not just to enable developing countries to enlarge their gross domestic product, important though that is, but to enable individuals to enjoy a better standard of living. In that respect, the donor and developing countries have signally failed. It is easy to see the reason. I was glad to hear my hon. Friend the Minister expressing optimism about a turning point being reached in Africa. None the less, while food production has expanded and economies have grown, the benefits have been negated by the vast proliferation of the population.
Population statistics are becoming almost hackneyed, and certainly they are mind-boggling. In my lifetime the world population has grown from about 2 billion to 5 billion, and in another 11 years it will be 6 billion. Because of famine, most of the emphasis of work on controlling the population in recent years has been concentrated on Africa. However, three fifths of the world's population live in Asia, and 17 per cent. live in India on 2·4 per cent. of the

world's area. Each year, India's population grows by about 16 million, which is equivalent to the entire population of Australia.
Millions may not mean much to most of us, but thousands are more comprehensible. Each day, 1,500 people move into the city of Bombay. That means 10,500 per week or 536,000 per annum. Those figures take no account of indigenous population growth. People move there because of high birth rates and lack of jobs in the rural areas. Unfortunately, Bombay is not unique. Every major city of Asia, Africa and Latin America is suffering the same experience. The consequence is squalor beyond belief. In Bombay, there is virtually no traffic island that has not become a hutted slum—and to use the word "hut" is to exaggerate the conditions that exist. Instead of standards and conditions improving, they are deteriorating.
What is to be done? At the strategic level—and I return to a point I made to the hon Member for Linlithgow—it is necessary in the world interest to reduce population growth and ultimately to stabilise the world's population. At grass roots level, there is even more urgency if a better life is to be created. There must be more aid for population programmes, so that the world's finite capacity for people is not overtaken and so that economic growth may have a chance of getting ahead of population growth. I refer not to aid for family planning alone, because the need is much more sophisticated. I was reminded of that when I paid a visit to India and Nepal in January, in the company of five hon. Friends, including my hon. Friend the Member for South Hams (Mr. Steen). We were generously sponsored by the International Planned Parenthood Federation. I hope the federation thinks that it got its money's worth, because we all learned a great deal from that experience. We have already shared that experience with others and shall continue to do so.
I do not want to quote too many statistics, but they are a way of drawing attention to the scale of the problem. In 1961, Nepal had a population of 9 million people. It is now 17 million, and will be 21 million by the year 2000. The population growth rate is between 2·7 per cent. and 2·8 per cent. Nepal used to export rice to India, Burma and Bangladesh, but now it must import rice. Land hunger is intense and destructive. Arable land amounts to only 14 per cent. of Nepal's land area, so steep hillsides are deforested and tiny terrace fields constructed in their place. When the rains come, top soil is washed from treeless slopes by floods that inundate Bangladesh, as they did in the last monsoon.
We were told that it had been calculated that while, in the widest interest, 42 per cent. of Nepal should be afforested, today the figure was down to 29 per cent. If there are not to be economic, social and environmental disasters in what must now be one of the most magnificently beautiful countries in the world, drastic action is needed. Fortunately the King of Nepal, the Government, Parliament and the NGOs agree on that. They have ambitious targets to reduce population growth from today's 2·7 or 2·8 per cent. to 1·2 per cent. by the year 2000. If they manage to reach that target it will be an incredible achievement.
India's population will grow by 500 million in the next 30 years. There may be the food to feed them, for there is a degree of optimism about the country's ability to produce the required extra amount, but what that figure will mean for the environment, national and international,


is a horrific thought. There is the same desire to slow population growth among many people in India, especially the voluntary organisations, but, sad to relate, there is a clear lack of political will and leadership. We were told that that was because it was election year. The memory of Sanjay Gandhi and alleged compulsory sterilisation makes politicians sensitive, although at present all parties agree about the problem.
Meanwhile, in this election year, the momentum for population control programmes comes from the excellent Family Planning Association of India. That association and its equally excellent fellow association in Nepal are undertaking, with and without Government help, a variety of projects that can go under the heading of community development and whose ultimate objective is to limit the size of families. They include skills training, literacy, child and maternal health care, parasite control and help for small farmers. The basic aim is to make people confident that they have the ability to change for the better their lives and the living habits that they inherited from their forebears, above all by removing the need for a huge family—many of whom in any case died before adolescence in past times, as too many still do. That is why it is so important to improve child health.

Mr. Steen: My hon. Friend has mentioned the problem of the size of India's population, 70 per cent. of whom are illiterate. Does he agree that the Family Planning Association's most important task is to educate people—especially women—in India and Nepal, and to help them to understand how to control the size of their population? Does he not think that the Government could help enormously, not only by funding national and international bodies but by ensuring that the money that they give to India and Nepal is earmarked for such community development work?

Sir Charles Morrison: I agree entirely with my hon. Friend. In fact, he has anticipated what I was going to say in a few moments, so I shall probably say it all over again.
There is a vast problem to be tackled in India, Nepal and many other countries, and, like my hon. Friend, I should like the Government to do much more in the sphere of population-related aid. I do not for a moment wish to imply that the Government have been idle in that regard; far from it. In November or thereabouts, my right hon. Friend the Prime Minister demonstrated her understanding of the population threat when speaking at the Margaret Pyke centre, and in a letter written in January reminded me that support for population-related work within the aid programme had more than doubled, to £16 million, since 1981. My hon. Friend the Minister also mentioned that earlier today, and a good deal of the credit for that increase must go to him. None the less, much more needs to be done.
I was glad to hear that last year a health and population adviser had been appointed to the ODA development mission in Malawi. Does that set a precedent for such appointments in other ODA missions? To what extent does the ODA ask developing countries how they can best be assisted to overcome population problems? Of course I know that the ODA has its own excellent project in Orissa in East India.
Demand on the resources of British charities such as Population Concern and Marie Stopes International and on other NGOs, both British and from other countries, far outstrips supply. They need more support to meet requests from NGOs in developing countries for project funding. Indian politicians themselves emphasise how much more cost-effective and less bureaucratic than the Government NGOs are. I should also like to know whether the Government are holding any talks with the new American Administration about the need for a restoration of USAID funding for IPPF and the United Nations fund for population activities, so regrettably withdrawn in 1984. Will the British Government please do their best to persuade the United States of the importance of such funding?
I imagine that the ODA is responsible for drafting the sections on overseas aid in the public expenditure White Paper. This year's White Paper, Cmnd. 602, states, under the heading "Aims and Objectives",
The purpose of the overseas aid programme …is to promote sustainable economic and social development and to alleviate poverty in developing countries, particularly the poorest.
That purpose will not be achieved unless population growth is controlled, yet the rest of the section makes no mention of population. Rightly or wrongly, I detect a certain prissy sensitivity about mentioning population control. I trust that the Government will be a little more robust in future, as it lies at the root of sustainable economic and social development.
Finally, let me express a pious hope. We heard from the Chancellor on Tuesday that we now have a Budget surplus of £14·5 billion. For fear of adding to inflation that money cannot be used for capital investment or other constructive purposes—much to my regret—and so it is to be used for the, in my view, rather pointless exercise of reducing an already low and continually decreasing level of national debt.
Is this not the moment above all to provide more money for overseas aid? It would be an excellent way of getting rid of money without creating more inflation—even better, I suggest, than repaying debt, which means that someone has more money to spend domestically and thus, ultimately, perhaps to add to inflation.
Behind every world problem—economic, social, environmental, the Brazilian rain forest or Nepal forests—there is an excess of population growth. It is the most fundamental issue that we have to face in the sphere of overseas aid—and much more widely than that. I trust that the Government will continue to pay increasing attention to it.

Mr. Jeremy Corbyn: On 23 February I and my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) hosted a development forum in my constituency, called the Islington aid development forum. Its slogan was "Think globally, act locally."
A number of people came along from local organisations that had been lobbying for increased overseas aid and for help with the environmental problems of the world and the community. It is significant and interesting that those people were passionately concerned about poverty all over the world and about the environment and that they were equally passionately concerned that something should be done politically.
The people who came together in that forum were not necessarily wealthy people. They do not live in a particularly wealthy area. However, they feel that there is something morally wrong in a world where two thirds of the population are fairly poor, where a large number of people are very poor, and where a very large number of people live in the most appalling poverty. I am grateful to my hon. Friend the Member for Eccles (Miss Lestor) for ensuring that we can address that problem today. It is an indictment of the House that we so seldom debate matters that affect the whole world. It is to the credit of my hon. Friend the Member for Linlithgow (Mr. Dalyell) that he was prepared to stay up half the night to raise the crucial matter of the environmental problems that are associated with the Brazilian rain forest.
The House cannot continue to ignore the fact that large numbers of people in the world do not enjoy a decent standard of living. Many people in this country do not enjoy a decent standard of living but, globally, the lot of many people is a life expectancy of less than 50 years, of infant mortality rates that would be a disgrace to Victorian England, never mind now, and of an incidence of preventable disease that is a shame and a scandal. All that could be changed if there were a real international will for change.
It is not just a question of moral outrage, which is right and fair enough, that has to be addressed. It is also a question of the survival of the planet as a whole. We cannot continue to promote the redistribution of the wealth from the poorest to the richest countries of the world and to destroy the world's atmosphere and use up its natural resources at the present rate. If we do, there will not necessarily be a cataclysmic end to the world, although that is possible. There is more likely to be a growth of environmentally-related illnesses, major climatic changes and serious consequential problems.
My hon. Friend the Member for Linlithgow was right to refer to the Amazon rain forest. He spoke about it very well and showed a proper understanding and concern for the problem. I first visited the Amazon rain forest 20 years ago. I had been working in Jamaica as a voluntary service overseas volunteer. From Jamaica I was able to travel throughout the West Indies and the whole of South America. I have had a great interest in the region and the continent ever since. At that time, 20 years ago, we drove on buses and trucks through the rain forests of Guyana, Surinam, French Guyana and Brazil. Even then, the chain saws and the diggers were tearing the forests apart. I went on a logging expedition in Guyana. At that time, the wood that they were after was Demerara green heart, a very valuable timber. The timber was so valuable that a scouting party was sent out to locate the Demerara green heart, to mark the tree and to clear a small area round it. Then a bulldozer went in and destroyed everything in its path in order to get at that one tree, cut off the major part of the trunk and take it awy. They left a clearing that was a potential desert. As the clearing went on and on, large areas of the rain forest were destroyed.
My hon. Friend the Member for Linlithgow referred to the fact that the soil construction is weak. It cannot sustain growth when the forest cover has gone. The initial wealth of the soil comes from ash where there has been burning of the scrub. That creates temporarily very fertile land. However, the fertility of the land is leached out within a very short period and a desert develops. That has been happening at an ever increasing rate for 20 or 30 years.
The Minister said, quite correctly, that we cannot interfere in the internal affairs of other countries and tell them what to do. The problem, however, is that environmental matters and the world climate cannot be dealt with on a national basis. It is no good complaining about pollution from another country if we, too, are polluters. We must accept that it is perfectly reasonable for people in Scandinavia to complain about the acid rain from this country that is damaging their forests. Likewise, it is right and proper that we should protest strongly about the destruction of the Amazon rain forest because of the effect that it is having.
The destruction of the Amazon rain forest means that large areas of that forest are becoming deserts. It is leading to the loss, day by day, of whole species of plant and animal life. It is also leading to the death of the people who live in the rain forest. The prospectors, the loggers, the mining companies and all the others who go into the rain forest are carrying out a pogrom against the Indians. The number of deaths that have resulted from that pogrom is frightening.
We, too, are responsible for what is going on in the Amazon rain forest. These things are not happening in Brazil necessarily because either the Brazilian people or the Brazilian Government want it to happen. That is true, too, in Sarawak and in west Africa. The people in Sarawak and in west Africa do not want it to happen. We must examine the economic situation that has driven the world into destroying its natural resources at this rate, including the destruction of the world's rain forests.
Two years ago, during the Christmas Adjournment debate, I raised the subject of the Amazon rain forest. I complained in that debate—and I still complain—about the way that the British Government—through the World Bank, the IMF and the EEC—have subsidised the destruction of the Amazon rain forest. They have given money towards the development of the Grande Carajas iron ore mining project. They have also given aid for other mining projects that have promoted the destruction of the rain forest. The Government are responsible for financing some of that destruction.
Brazil is a large and wealthy country, with a fairly small population for its size. It is also a deeply indebted country. Every time that the question of the Brazilian debt is raised the solution that is offered by the world's financial powers—the IMF, the World Bank and the private banking system—is that Brazil must buy its way out of its debt; therefore is must promote exports and the sale of whatever natural resources it has. We are, therefore, bankrolling environmental disasters. The Sierra club has produced a booklet called "Bankrolling Disasters." The booklet deals with the international development banks and the global environment. Page by page and issue by issue, it lists places where the use of World Bank finance to sort out debt problems has led to the most appalling environmental destruction. As my hon. Friend the Member for Linlithgow said, the destruction of the Amazon rain forest has cataclysmic effects for the rest of the planet. We have to examine our responsibility for that through the debt system.
I hope that the wise words of the people who live in the Amazon rain forest to the directors of the World Bank and the IMF will be listened to. Those people understand that we cannot continue destroying the forest without


developing major problems. They live in that forest, they understand it and they give sound advice. We should listen to them and accept their advice.
The understanding of the problem is widespread and there have been some changes in attitude. The World Bank now accepts that it has a role in preserving the environment and cannot continue funding such disasters.
We have to ask what we can do? Other climatic changes are occurring. Global warming is caused partly by the destruction of the rain forest but is also a result of industrialisation. We should also take into account the destruction of the ozone layer and other related factors.
Like many hon. Members, I receive a great deal of free post, most of it unwelcome and much of it heavy commercial lobbying. But I recently received an American business magazine dealing with the greenhouse effect. I am quite interested in that so I hurriedly opened it and turned to the relevant page to discover how it proposes to deal with the greenhouse effect. The article contained a series of lurid maps showing the level to which the sea would rise, which countries and which parts of the United States would be flooded and what the climatic changes would be. It had some rather clever graphics showing oranges growing in the Arctic. But it did not conclude that we could not continue burning rain forests at such a rate. It advised that if one were investing in real estate in the United States, one should not invest in anything less than 50ft above sea level because eventually it will be flooded. It saw the problem simply as a commercial matter that had to be faced. I hope that we take a far more serious attitude.
Today we are debating world interdependence. Hon. Members have pointed out the environmental problems that are developing. We are debating what Britain and the British Government should be doing about them. The aid Budget is very important as it has to be relevant to environmental needs, environmental causes and the poverty that exists in many poorer countries. Although the Minister gave a pretty robust performance in defending the level of the aid budget it is nowhere near 0·7 per cent. of GNP—the figure recommended by the United Nations. There is no reason why it could not be much higher. The British Government have set a surplus of £14 billion next year on Government spending and have decided not to increase the aid budget and other elements of social spending. Clearly the British Government could spend much more money on overseas aid, if they wanted to do that. There is also the matter of the quality and monitoring of that aid and the projects funded from it. The Minister described many laudable projects that we support and that are extremely beneficial to people in the countries concerned. However, there is no point in the British Government promoting their overseas aid policies as effective and helpful if they are doing nothing to promote world economic policies that benefit the poorest people in the poorest countries of the world.
I have some figures which show the level of official development finance to less developed countries. In 1987 the figure was $59·3 billion. However, the figures showing the burden of debt service payment faced by those countries was $70·9 billion in principle repayments and $54·0 billion in interest repayments, totalling $124·9 billion. In other words, the aid from the developed countries to the poorest countries in the world has been

more than repaid twofold. It has been repaid through the servicing of debt, interest payments and the repatriation of profit by multinational corporations.
In country after country facing serious debt problems, what solution is offered by the world's financial institutions? A team of experts fly in on the handiest Pan Am flight, they put up at the biggest hotel they can find and they start to examine the books of the country concerned. After examining the books they say, "You are in far too much debt and you must get yourself out of it. The way to do that is to cut public spending, reduce Government public sector debt within your country and promote export industries and export crops." In other words, they recommend selling-off a large number of public sector assets.
If one wants to see where such action leads, one can look at some west African countries where state-owned industries have been sold off to foreign investors, leading to a loss of some political control and where there has been a development of monoculture crops for export, which has often done serious environmental damage. In some cases, poor countries are exporting high protein food crops while children in the country are malnourished. They are doing that because they have to pay back their debts and they are told that that must always be the priority. Therefore, we need to look at the treatment of the commodity prices of poor countries.
I have an example taken from Southmagazine, which is an excellent monthly magazine which I recommend to everybody. It details every month what commodities one can buy. It shows that the real prices of jute, tea, cotton and other crops have decreased over the past 15 years compared with the cost of oil or of importing wheat. Many countries are losing out as a result of increased prices and increased interest payments. The debt crisis is serious, and I hope that when he replies the Minister will tell us what plans he has to do something about it.
I want to mention the British Government's attitude to poorer countries in relation to 1992 and the EEC. There was a delegation here recently led by Mr. Julian Hunte from St. Lucia concerning the implications of the Single European Act for the survival of the Windward Islands. There is a problem because of the likelihood of the closure of markets for bananas and some of the smaller eastern Caribbean countries and the low price that the producers receive for them. It is necessary for the British Government to do something to protect the markets that those islands have traditionally enjoyed. If not, they will become seriously impoverished and further indebted. They will lose out because of Britain's obsession with moving deeper into the Common Market and accepting the Common Market's single economy rather than protecting those who have traditionally supplied goods to this country.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Eggar): I had an interesting exchange with Mr. Julian Hunte and the Prime Minister of St. Lucia. Did they not make it clear that they were aware of our full support and determination to convince the other countries of the European Community that the Windward Islands would continue to have access for their bananas to the United Kingdom market?

Mr. Corbyn: Yes. I also had an interesting discussion with Mr. Hunte and I thought that he was a man to be admired. The point is, the British Government have to


convince the EEC of the need to protect the economies of the Windward Islands. I am glad to hear that the Minister intends to try to do that but he cannot give an absolute guarantee. My concern, and the concern of Mr. Hunte and many others within the Caribbean is that they will lose out because of pressure that will be applied by other EEC member states, perhaps against the wishes of the British Government. As I said, I am glad to have the Minister's assurance but a guarantee can be given only by the EEC.
I want to deal with the way in which the debt crisis affects so many poor countries. I have pointed out, as have others, the environmental consequences of the debt burden on those countries and the poverty that develops because of that debt burden, the usury rates of interest and the redistribution of wealth to the richest countries in the world. Yesterday, the Prime Minister in a written answer said:
The United Kingdom and others will reduce interest rates to prevent debt from compounding. The United Kingdom has also written off £1 billion of old aid loans, of which nearly £300 million were for sub-Saharan Africa. We have also agreed to subsidise loans to the poorest countries of up to about £750 million through a special IMF facility, the enhanced structural adjustment facility, of £4·5 billion."—[Official Report, 16 March 1989; Vol. 149, c. 275.]
That sounds all very well until one looks behind it to see what that enhanced structural adjustment facility will be. Say that to people in poor countries who are losing hospitals, schools and social facilities. Say that to people who are forced to move into slums and shanty towns in South America, Africa and the Indian sub-continent. Those countries need their debt burden removed and a trade arrangement and policy with the richer countries that recognises the need to eliminate poverty by giving their people self-respect through proper prices for the products that they produce, protection of the environment in their countries and the rest of the world and rather less of giving power to the IMF, the World Bank and multinational companies to make much money out of them.
I am glad that we have been able to have this debate, but the House should return to the subject more often because it is being ignored too much. We cannot continue to live in a world that is so bitterly divided between rich and poor and so dangerously on the edge of an ecological abyss without at least discussing it and ensuring that we do all that we can rather than ignoring the problem and hoping that it will go away.

Mr. Ian McCartney: On a point of order, Mr. Deputy Speaker. I ask the House to bear with me while I seek your advice. It is obvious that the motion in my name will not be reached because of the excellent debate on overseas development. I had intended to highlight, through the motion and in my speech addressed to the Secretary of State for the Home Department, a series of violent and intimidating incidents involving Mike Lyons, who is a managing director of MYL Security. He is inflicting physical violence upon, and instilling fear in, an increasing number of my constituents and of those of my hon. Friend the Member for Wigan (Mr. Stott). Given that we shall be unable to deal with this matter today and given the seriousness of the situation in my constituency, will you, Mr. Deputy Speaker, assure me that the usual channels will be used to ensure that the substance of the motion and my speech, which would have outlined a catalogue of terror, will be brought to the attention of the

Secretary of State so that he can deal with it.? It has been on his desk since 20 January, but I should like to ensure——

Mr. Deputy Speaker (Sir Paul Dean): Order. I have the drift of the hon. Gentleman's point of order. Nothing is obvious in this place; it may be possible to deal with the hon. Gentleman's motion, which is the second Order of the Day. He has put his points on the record.

Mr. Anthony Steen: Until the hon. Member for Linlithgow (Mr. Dalyell) switched the debate to an environmental one, the discussion was largely about the macroeconomics of the Third world and developing countries. I am grateful to the hon. Gentleman for swinging the debate away from macroeconomics and discussing, most movingly, the problems of the Amazon rain forests and related difficulties.
The hon. Member for Linlithgow was followed by an excellent contribution from my hon. Friend the Member for Devizes (Sir C. Morrison), with whom I had the privilege of visiting India and Nepal to see at first hand the problems of the Third World.
The hon. Member for Islington, North (Mr. Corbyn) continued the discussion about the environment, and I should like to continue in this vein. We have considered the problems of manufactured gases—chlorofluorocarbons—but only 14 per cent. of manufactured gases contribute to the greenhouse effect and the warming of the atmosphere, whereas 50 per cent. of carbon dioxide—CO2—gases are responsible for the greenhouse effect and the warming-up process. Population and the growth of it is far more significant and produces three times more CO2 gases thereby than manufactured CFCs. While the world has been debating the greenhouse effect and the way we must eliminate CFCs from our atmosphere, it has singularly failed to consider the problem caused by the continued growth of population. As I have said, 50 per cent. of the greenhouse effect is a result of the burning of fuels by people on this planet.
I want to talk about the problem of population and how it affects the environment. Let us consider India, where 800 million people live now and where there will be 1·3 billion people by 2050, whereas only 400 million people existed there at partition in 1947. Seventy per cent. of Indians are illiterate—about 470 million people—and 50 per cent. of the population are under 25. The improved health care is lowering the mortality rate for young and old. About 30 per cent. of couples of child-bearing age practise some sort of birth control, but the remaining 100 million do not.
My hon. Friend the Member for Devizes touched on the problem of the campaign led by Sanjay Gandhi, which has resulted in people refusing to have their children inoculated because they fear that it is a sterility injection. There has been an equally rapid growth of population in Nepal, where literacy among women is only 12 per cent. and infant mortality is 128 per 1,000 live births. Life expectancy is under 50 years and there are 6·1 live births per family.
The environmental implications of that enormous population growth and its effect on the greenhouse effect are greater than any amount of CFC gas. The environmental implications of unrestricted population growth are immense. The impact is not being grasp either


by the British Government or other Governments of the developed world. Although it is true that India has sufficient food to support its 800 million population, it does not have sufficient food for 1·3 billion. As my hon. Friend the Member for Devizes said, Nepal is already having to import rice.
Bombay is another problem. The population of Bombay is 10 million and growing at the rate of 1,500 a day. That is important, not only because people have to sleep on traffic islands or pavements, but because the people are clearing land all around Bombay to build shanty towns, roads and more factories. The major cities in India, and the world generally, are expanding as population floods from rural areas into the towns.
The satellite pictures, which other hon. Members have mentioned, not only confirm that the forests of the Amazon are being destroyed, but that the cities of India and Nepal are causing the loss of forests in the sub-continent. A further point, on which other hon. Members have not touched, is that India and Nepal are so cold for three to four months of the year that trees are cut down, not by "wicked capitalists" but by the people in Nepal and India who are cold. They warm themselves at wood fires and cook over them. The trees have disappeared largely because of that and that is the reason why we have such a great problem with carbon dioxide.
A further problem is that a series of poor monsoons was succeeded by a good one last year. As many trees in India and Nepal had been cut down, the water cascaded down not only in Bangladesh, but in Nepal, and blocked up the rivers which were supposed to be feeding into the new hydro-electric plants. Many spin-on effects result from those environmental problems.
further difficulty is that the poor villagers want water. They have to sink deep wells, perhaps 300–400 ft, and to pull up that water they need greater energy supplies. As more irrigation is required to feed the ever-increasing population, the water table continues to drop and wells have to be dug ever deeper, with the result that the power needed to bring up the water is even greater. There are increasing difficulties and environmental problems as the top slice of the population in the sub-continent want more air conditioning, fans and refrigerators which demand more and more power, while those at the bottom end of the scale want ordinary things to keep them alive; they need more water for irrigation and more power to get the water out of the ground. There is a vicious circle in the Third world, the sub-continent.
The description "poor, powerless and pregnant"—a description of women that appears in all the Family Planning Association periodicals—rings very true in India. The key to the future of the Indian sub-continent lies with its women. In the past, the mortality rate for children under five was such, and the economic necessity for large families so pressing, that women would have more children to ensure a sufficient number of boys to provide security for their old age. There were also religious reasons: only boys are permitted to perform funeral rites for the 80 per cent. of the population of the sub-continent who are Hindus. Poverty militates against small families. Today in the Tamil Nadu province, firework and matchbox factories still employ about 45,000 children between the ages of five and 13 because of their deft

fingers. Although child labour is illegal in India, the Indian Government take no action, as they are aware of the impact that such action would have on the poorest families.
But changes are taking place. One university is insisting that every girl takes a compulsory paper on family planning. The Godrej corporation, which employs 20,000 people in Bombay alone offers a purpose-built home to those with fewer than three children. If employees have a large family, they cannot continue in their home. The Civil Service in India is experimenting with increment incentives for those with no more than two children. There is growing awareness of what needs to be done.
My hon. Friend the Member for Devizes mentioned the community development work of the Family Planning Association—similar to the work done in this country by the task force and the young volunteer force, which I had the privilege to direct 20 years ago. Folk songs are being adapted to popularise the message, with the refrain "Keep it two, keep it two." A small group of family planning bodies is waging war against seemingly impossible odds to tackle a population growth which is out of control and which is destroying the environment as fast as any aerosol.
Our Government could do more, but not by increasing their aid budget, of which something has been made this morning. The answer is not more money, but better targeting. The money must go to help people to control the size of their families. That must be our number one priority. Everything else that we do is secondary. I was slightly surprised that that was the sole thrust of this morning's debate.
My hon. Friend the Member for Devizes is chairman of the Game Conservancy Council. While we were in India, he talked to me about the red grouse population cycle. I do not know whether the House knows about the red grouse population cycle. If the population is left unchecked, every seven years a large number of its members will be killed off by starvation, disease or parasites, or sociologically—the birds will commit suicide, rather like lemmings because they cannot stand each other any longer. Would the House have the people of the Third world do the same? Surely, it is time for the developed world to realise that population control is the key to the future of life on this planet.

Mr. Bowen Wells: I apologise to the House, to the hon. Member for Eccles (Miss Lestor) and to the Minister for Overseas Development. I shall have to leave after I have spoken because I have promised to be with my children this afternoon on an important occasion. I thank the hon. Member for Vauxhall (Mr. Holland) for allowing me to make my speech and then to leave.
I congratulate the hon. Member for Eccles on obtaining this debate. She and I are accustomed to debating these matters after midnight. It is a welcome change to be in the Chamber at this more felicitous time of the day.
I also pay tribute to my hon. Friend the Minister. My right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley) made an excellent speech, and I support his eloquent call for an increase in the overseas development budget. He ended his speech by paying tribute to my hon. Friend the Minister, but I begin by doing so. Senior economic development academics who are not our political friends recently volunteered to me that they


consider that my hon. Friend the Minister is probably the most effective and articulate Minister for Overseas Development whom they have known. Protected by the opinion of others from the accusation of being a creep, I add my own admiration for and envy of the skilled, elegant and deeply intelligent way in which my hon. Friend carries out his duties and leads his Department. In the past 10 years, I have not seen the morale of the Department higher than it is at present, which means that its excellent work is carried on with a spirit of enthusiasm that serves our country and overseas countries extremely well.
My hon. Friend complains that his speeches are largely unreported, but those of us who read and listen to them cannot but admire the accurate analyses, the understanding of the issues, and the compassionate solutions proposed.
I start from the same statistic from which my hon. Friend and Sir Shridath Ramphal started in their recent speeches in Cambridge. It is also the starting point of the Bruntland report. I refer to the United Nations figure which suggests that the world's population will stabilise between 8 billion and 14 billion by the year 2020. In other terms, it will rise by between 60 per cent. and nearly 200 per cent. above today's level. That gives point to the matters raised by my hon. Friends the Members for Devizes (Sir C. Morrison) and for South Hams (Mr. Steen). Although, like them, I believe that the control of population is absolutely vital to bring about a higher standard of living for wretchedly poor people in overseas countries, it must be combined with a programme of economic and social development to enable poor people to plan their families so that they do not have to go on having children, many of whom die, but can look forward with confidence to their children growing to maturity, as we can in our country. That is the most potent means by which we can control population, so we must constantly examine the surrounding factors of economic and social development.
The global implication of the figures in environmental, political and social terms are enormous. As the hon. Member for Linlithgow (Mr. Dalyell) said, they are possibly apocalyptic. It must banish from anyone's mind the idea that overseas development is not our concern in the House of Commons and in northern countries, because if we ignore it the consequences will soon become apparent in changes in our climate, rises in sea level, falling trade and the lowering of our standard of living. Failure to do anything about it could even lead to global warfare, as desperate people with nothing to lose confront countries and people more fortunate than themselves. Unfortunately, I do not have time to develop all those themes, so I shall confine my remarks to five headings. Other hon. Members wish to speak in the debate, so I shall write to my hon. Friend the Minister to bring the other points to his attention.
Like the hon. Member for Eccles (Miss Lestor), I shall concentrate on the debt issue, which overhangs the whole subject of aid. If we cannot solve the debt problem, we shall be unable to make it up even by a fraction, through the volume of aid that we give, although I hope that we shall continue to give that aid. My hon. Friend the Minister has made the point time and again—it was also made earlier today by my right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley)—that the trading circumstances of Third-world countries are vitally important. They cannot trade if we do not resolve the debt problem.
Like the hon. Member for Eccles (Miss Lestor). I do not apologise for concentrating on this aspect. The three principles for dealing with sub-Saharan African debt pioneered by my hon. Friend the Minister and my right hon. Friend the Chancellor of the Exchequer were, first, that loans should be converted to grants or written off if they could not be recovered, those being public debts; secondly, the interest rates charge should be reduced to a sustainable level; thirdly, loan maturities should be extended to reduce annual payments to manageable levels while investment in the domestic economy of the debtor country can continue.
Those simple and well known remedies were to be applied to countries willing to agree to economic programmes which, in the judgment of the World Bank and the IMF, were likely to enable their economies to grow and thus make it possible for those countries to service their restructured debts. The remedy is simple to pronounce, but it has proved difficult to gain acceptability for it in the United States, Japan and Germany, although not in this country, which has a proud record to maintain. In Japan, America and Germany, the Government and the private sector must accept that losses have been incurred. Mr. Baker's plan did not succeed because the concept of loss was not conceded. The new American Treasury Secretary, Mr. Brady, appears to accept that debt reduction must be accomplished, and I am glad to see that my friend Senator Bradley, in welcoming Mr. Brady's initiative, has been foremost in the United States in advocating that those losses must be faced. Clearly, the question of how this is to be accomplished in the United States by the private banks, without bringing into question their own financial stability, still has to be worked out. The United States authorities cannot continue much longer to ignore the fact that they have incurred losses on loans to South America, which must in United States law be reflected in the balance sheets of the banks.

Mr. Carrington: My hon. Friend would be advised to recognise that the problem for the banking system is much smaller than it was. In the United States and in this country banks have already made adequate provisions for losses which they are likely to incur on such debt. The real problem with that debt—this is why it has not been written off—is that the countries involved will need to borrow in the future and if their debt were written off now their access to credit markets would be severely restrained for the next 20 years.

Mr. Wells: I am grateful to my hon. Friend. I was about to make the latter point. He is right to say that the banks are in a stronger position than they were. There are some major banks in the United States which, if the Third world debt were written off quickly, would find credibility and confidence in them undermined, although that problem has receded. We should look to a new initiative now, while we do not face that imminent threat. That is why I have urged action on the matter in this debate and in other forums. During the painful discussions with the private banks, we should not lose sight of the fact that new wealth-creating investments must be made—the point made by my hon. Friend the Member for Fulham (Mr. Carrington). If there is no new investment in those countries they will not overcome their debt difficulties. If the debt write-off means that the private banks and the


private sector will not invest, those countries will continue to become poorer, their populations will grow and environmental degradation will accelerate.
It is perfectly possible to achieve our goals by a combination of private and public sectors acting in consort to support each other through the IMF and the World Bank. My hon. Friend the Minister has said that he is turning his face against any idea of removing the burden of debt from the private banks and placing it on the taxpayer, and I support that, but he must bear in mind that to get out of the present situation public and private sectors must work in concert and through international institutions. This will involve a combination of Government guarantees to the private sector in return for innovation and imaginative reinvestment in those countries by the banks and by private companies; and it will involve strengthening the international lending institutions.
On the part of developing countries, this must involve a restructuring of their economies which will release the energies of their peoples to work effectively in productive enterprise. That will generate wealth at home and exports abroad, to provide the necessary hard currency to purchase spare parts and other goods to enable their economies to begin to work again.
The developed world, for its part, must reduce barriers to Third-world production and be prepared to pay modestly increased prices for that production. That meets the point about commodities made by the hon. Member for Islington, North (Mr. Corbyn). This will require Europe to stop producing subsidised products such as sugar and rape seed oil, which is to the detriment of Third-world countries. We must make a start, but the proposals to reduce the sugar price by 5 per cent. in the present agricultural round go in the opposite direction. I hope that my hon. Friend will make certain that his right hon. Friend the Minister for Agriculture, Fisheries and Food will ensure that those proposals are not agreed to by the Council of Ministers in Brussels.

Mr. Corbyn: Does the hon. Gentleman agree that the EEC should adopt a more generous and liberal attitude to the import of semi-manufactured foodstuffs from producer countries? For example, a fruit-growing country which decides to can the fruit and to manufacture jam should be encouraged to do so. It will then receive a greater proportion of the total wealth created by the fruit than if it exports the raw fruit.

Mr. Wells: The hon. Gentleman enables me to mention one of the points that I was going to leave for a letter to my hon. Friend the Minister. The hon. Gentleman is right. The rules of origin under the Lomé agreement must be modified to facilitate added value production and further manufacture in developing countries so that they can begin to earn their living—particularly in smaller and island states which have vulnerable and undiversified products to export.
American agricultural over-production and subsidising must also be reduced, as must Japanese protection of its rice and vegetable production. Few people realise that the price of rice in Japan is kept at well over 50 per cent. above the world price. Japan has fierce tariff and other barriers against the importing of rice from the impoverished

rice-producing countries around it. We must advocate changing such provisions to the Japanese and other countries.
Turning to the international institutions Mr. Moëen Quereshi, senior vice-president of the World Bank, made it clear at the all-party committee debt conference on growing out of debt that the World Bank was prepared to be given a more pro-active role in resolving debt provided that it was given the money and tools to carry that out. My right hon. Friend the Member for Tonbridge and Mailing mentioned the conference on 6 December. This must include the institutions being willing to reschedule their debts, particularly in Africa, the smaller Caribbean states, central America and the Philippines. That in turn will depend on the executive board, on which my hon. Friend the Minister has a representative. We must ensure that the board permits this policy to grow in the World Bank, because those institutions are essential instruments for the resolution of the problem.
Much work remains to be done and I hope that my hon. Friend the Minister will ensure that these matters are discussed and resolved at the meeting of the IMF and the World Bank in three weeks' time. I wish to refer to many of the excellent contributions which have been made today about the environment. The hon. Member for Linlithgow (Mr. Dalyell) was asked by an Amer-Indian chief from the Amazon basin what people living at the top of London tower blocks knew about his people's lives. The hon. Member for Islington, North certainly knows something about the subject, as he has shown today.
I had the good fortune to work in the tropical forests for many years—taking out the green heart, to which the hon. Member for Islington, North referred. I also had the good fortune to be conducted by a group of Amer-Indians on two expeditions up the river Essequibo and beyond to the highest mountain in Guyana, Mount Roraima. Just as they would be out of place in a block of flats in London, so I was a child in the forest with them. The Indians understand how ecology works and how to live with it, but we do not. I also had the good fortune to walk with those Indians for three months from the south of Guyana in the Rupununi to Manaus. It was an absolute revelation of the sensitivity with which, generally speaking, those people treat their environment, the intrusions into which, as the hon. Member for Linlithgow emphasised, are so abhorrent and dangerous.
We can cut down and use forests sympathetically. We can use them for the economic benefit of the world if we conduct forestry exercises to regenerate the forest. Forests regenerate very quickly provided that they are not burnt off and that the canopy is not cut away. There are sympathetic methods which are known to my hon. Friend the Minister and his researchers. I hope that we can make that advice and experience available to allow the forests to be exploited economically for the benefit of everyone with particular sensitivity towards the Amer-Indians and their way of life.
We must also remember that we deplore the 10 per cent. to 20 per cent. increase in carbon dioxide in the atmosphere caused by deforestation. However, we must also learn lessons in this country and in the developing world. Some 80 per cent. of carbon dioxide emissions come from the developed world and from power stations, the burning of fossil fuels and from motor cars and diesel engines. We should accelerate the introduction of catalytic


converters into this country on all our motor cars before the date that has been set. That would be a major contribution towards the reduction of carbon dioxide.
We should also begin to replant the forests which were cut down in the 19th century due to increasing population. By cutting down the forests, we created more land for agriculture. That enabled towns to form, which eventually led to the industrial revolution which is the basis for our present privileged economic position. We must make an ecological contribution now by replanting our forests. We cannot expect the impoverished people of the world in their overpopulated countries to bear an unfair burden.
I wish to advocate certain ways in which the ODA can assist the development of private sectors in Third-world countries which must be the true source of growth. The ODA and the Commonwealth Development Corporation, are already embarking on many important projects to bring the private sector in this country together with private sectors in Third-world countries. That work must be expanded and the amount of money which we hope will increase the aid programme should go exceptionally to the CDC to increase its programmes particularly in India and Pakistan and Bangladesh, to which it has just been introduced. Those programmes could encourage the development of private sector involvement.
The hon. Member for Islington, North mentioned the problem of the banana regime in the Caribbean, but that problem also exists among all the other traditional suppliers to the European Community, which have enjoyed not only access to that market but a privileged price for their products, enabling them in turn to pay a reasonable price to the banana producer in the country concerned. That programme has been highly successful, giving St. Lucia in the Windward Islands the highest income in real terms that it has enjoyed since sugar was king on those islands. We must find means by which that beneficial trading system can continue.
I, too, met Mr. Julian Hunte, but also Mary Eugenia Charles, Prime Minister of Dominica and Mr. John Compton, Prime Minister of St. Lucia. They visited the capitals of Europe, and intend returning in May, together with the Prime Minister of St. Vincent, to convince the Community's 12 other members that they should join the British Government to ensure that the present regime continues not only within the Lomé convention, because it is essential that it be rolled over into Lomé 4, but after 1992. The Government and the Opposition in the Windward Islands, Jamaica, Surinam, Belize and elsewhere are working in combination to bring that about. We must pay tribute to them for doing that. They can make the arguments with so much greater emotional impact than we can, and we should all support their efforts in whatever way we can.
I make no apology for making a constructive approach to the debt problem the centrepiece of my speech. No matter how much aid we give, if business cannot be developed and trade resumed—due to debt and the refusal of developed nations to invest—environmental, social and political problems will fester and multiply. They will affect our environment our climate and our standards of living. I call on my hon. Friend the Minister, in whom I have expressed so much confidence, to redouble his efforts to persuade his international counterparts to pursue the policies that I have sketched today and in which I believe.

Mr. Stuart Holland: I am glad that my hon. Friend the Member for Eccles (Miss Lestor) managed to give the House the opportunity to debate this subject, and add my thanks to those of other hon. Members who have spoken. I am glad also that the environment has been such a strong theme in the debate. I shall seek to touch on that subject as well as to deal with population control, the role of the market, and structural adjustment programmes pursued by the World Bank and the IMF.
In his opening remarks the Minister claimed vigour for market forces and referred to south-east Asia. The reality in south-east Asia, as stressed and hyped by the World Bank, is that four of its economies have done extremely well. However, two of those economies are minuscule, being island city states that were formerly United Kingdom colonies. The other two are Taiwan and South Korea, which have a special relationship with the United States. This has very much benefited their own development programmes. They also have benefited to a considerable degree by foreign direct investment by Japan.
The most successful of the four—South Korea—is not a classic example of the market economy. South Korea operates rigorous import licences. It has penalised importing firms when they have gone over their target on imports, and suspended their licences. It has also employed price control policies, with penal taxation of profits over the price control ceiling. It has undertaken detailed negotiations with individual foreign firms investing in its economy, to the point at which it renews several hundred contracts with such firms on the basis of the role that they play specifically in relation to South Korea's own development objectives.
This is very close to the planning agreement approach that I, along with others, proposed for the last Labour Government, which I regret was not implemented with the same rigour as in South Korea.

Mr. Carrington: The hon. Gentleman should also mention that for many years Korea has pursued a policy of enforced labour overseas for a large proportion of its work force, and has largely rebuilt the middle east as a result.

Mr. Holland: That is a significant factor in terms of the scale of remittances from abroad, and it is one way of disposing of surplus population.
South Korea's development model, however, has been pursued with scant regard for democracy, and the same applies to Taiwan and Singapore.

Mr. Chris Patten: Does the hon. Gentleman intend to deal with south-east Asian countries such as Thailand and Malaysia?

Mr. Holland: If the Minister had read The Daily Telegraph yesterday he would have learnt that one of the new low-priced automobiles imported to this country, the Proton—constructed with Japanese technology and basically a Japanese car—is coming from Malaysia, which pays lower wage rates. One of the reasons why a company such as Matsushita does so well on the world market is that, as a Japanese firm, it has been investing in Malaysia, where the cost of labour is a tenth of that in Japan. Although Matsushita may not be a household name in this country, Technics, Panasonic and Quasar are. They are brand names of Matsushita, which is a world electronics


giant. There are special reasons why those countries have been able to do well, many of which involve foreign direct investment and a special relationship with the United States.
Several hon. Members, especially Conservative Members, have mentioned population control. It is important to be aware, as hon. Members on both sides of the House appear to be, that families in developing countries are so large not simply because women have not heard of birth control or are unaware of its advantages, but because unless they have sons to support them in their older age they may become destitute. That relates to another point that I want to explore: the role of social programmes, and whether developing countries can ever have a basic form of social security.
It is no accident that, with higher levels of income, so that people can put resources aside for their own retirement income, birth rates drop. It is also no accident that the more developed the society and its social security system, the lower the birth rate. We should be especially concerned to support such programmes, funded on a long-term basis, in developing countries whose Governments are concerned to provide an elementary subsistence for those in retirement.
Social, housing, health, education and urban renewal programmes are undermined by the imperatives of debt repayment. Net transfers of resources from South to North reduce trade income and jobs in the world as a whole. The first two Brandt reports concentrate on mutuality and on the fact that we live in an interlinked world.
Economic and environmental factors are also interlinked in terms of the global economy and the environment. It is in part because it is under pressure to repay its debts that Brazil is destroying the tropical rain forest and contributing to the global greenhouse effect. Brazil is faced with other internal pressures. During the 1960s and 1970s Brazil achieved phenomenal rates of investment. The modernisation of her industrial structure—as in South Korea—was through extensive public sector intervention. However, Brazil has suffered the consequences of imbalanced growth.
There has been hyper-growth in the major urban areas, especially around Sao Paulo. The increased efficiency and productivity of agriculture, which Argentina has been unable to parallel, has led to a reduction in the number of people working in agriculture during the post-war period. That has led to people moving away from the land and into the towns. That movement has been used as a staging post—a classic feature of migration of this kind—because those people later moved to the cities.
The Brazilian Government offered land in the north-east to try to offset the drift of the population towards Sao Paulo or Rio de Janeiro. They tried consciously to develop what was then an under-populated region that had considerable natural resources. The climatic and environmental factors were not seriously considered.
Many tropical trees have relatively shallow roots that extend, none the less, over a wide area. The nutritional content of the soil that sustains the Amazonian rain forest

is relatively limited. When the land has been cleared it is possible to get only two or three years' produce out of it before more land has to be cleared.
What are we to say to the Brazilian Government and to other Governments who are in a similar position? The destruction of the Amazon rain forest, and the consequent greenhouse effect, affects us all. We, who have polluted the world for decades, cannot say to them that it is time that they stopped destroying the rain forests. We cannot expect the South alone to pay to prevent pollution or the greenhouse effect. The North has been the world's main polluter for decades. It would be unjust to demand full repayment by the new democracies in Latin America. The debts incurred in Latin America have often been caused by dictatorships. They have used aid to finance arms purchases. In Brazil, speculative developments in the north-east can be attributed to the armed forces.
Both North and South need to work together to control pollution and to use resources in such a way that the environment can be sustained. However, that has major implications. Economists used to say that air and water are free, but the Government are putting a price on water. It is a depressing breakfast-time experience to see in the newspapers a typist sitting up to her waist in the wet and to turn over the page and see that we shall have to pay for the water that produces her clothes. When I see how much water it takes to produce a car, I am even more encouraged to support policies for public urban transport instead of private transport. A price is being put on water which is to be marketed by the Government. Therefore, why should the British Government object to the Brazilians charging the rest of the world for maintaining its oxygen and the stability of its climate? If that principle is not accepted, nonetheless it is important that we try to relieve the pressure on Brazil in terms of debt repayment in such a way that shows that we are serious about making some contribution to offset the short-term costs which Brazil might face through bringing pressures to bear on those very powerful vested interests which are reducing the tropical rain forests.
Brazil has done her part and has reduced her imports to repay debt from $24 billion in 1981 to $13 billion in 1986. In other words Brazil reduced her imports by half. It is time for the world to address the environmental issues and the readjustment of debt under the same heading.
The global debt of the developing countries is $1·2 trillion. Brazil's debt accounts for just under 10 per cent. of that, but as my hon. Friend the Member for Linlithgow (Mr. Dalyell) said, the costs of affecting the climate by reducing the Amazonian rain forest cannot be projected in a linear way just as, although the population crisis is serious, population can be projected in a linear way. If the flip effect affecting the northern hemisphere occurs in the way that my hon. Friend described, we know of no expenditure that could reverse it. The measures which may have to be taken to adapt northern hemisphere urban conglomerations to a change in the environment would cost trillions of dollars and still not succeed in returning the world's climate to the equilibrium which it has enjoyed for so long. In that context are the Government prepared to make a contribution to the reduction of the $10 or $20 billion of Brazilian debt? If the Minister were to reply that we cannot reduce debt in relation to one single issue, I would argue, and trust that he would argue with others


that we should link debt write-off to programmes which meet other objectives, especially the needs of particular social groups.
The priority for development should be social programmes which should aim for social welfare, especially that which betters the situation of women and children. The problem with the IMF and World Bank programmes is that social needs are residuals which are met only if the country concerned manages to generate sufficient of an export surplus to enable it to afford social expenditure. We should be achieving a combination of grant and low-cost loan programmes concerning food and nutrition, sanitation and health, and housing and urban development linked to regional development. Many Conservative Members referred to what is happening in Bombay and other major Indian cities. That involves the need for regional development programmes to reduce the drift of population to the towns.
In that context we should also be taking extensive measures to support the UNICEF proposals for adjustment with a human face, which are designed to link debt write-off to programmes that benefit children. We should be seeking to introduce a concept of trade-off. That is a term often used by economists in situations which are far less apocalyptic than the possibility of sudden world climate changes. Why should we not trade-off the preservation of the world's environment against writing off debt? Why should we not be trading off, also against the writing off of debt, the investment in the future of social groups at risk and the reduction of world population by increasing social living standards in the developing world?
I want to say a word about the role of the IMF and the World Bank since some key meetings are about to take place on the question of structural adjustment policies. We used to know what the IMF and the World Bank were doing. Basically, the IMF was concerned with short-term balance of payments adjustments and the support of those adjustments rather than the imposition of devaluation and deflation on the countries concerned. That was the original objective held by Keynes and argued at Bretton Woods. It was accepted by White and others at the time. In other words, the main role of the IMF was to avoid deflation or devaluation by sustaining a country through a temporary balance of payments adjustment. Now, the main role of the IMF is different. It is imposing a uniform package of deflation, devaluation and deregulation on the economies concerned, together with ideological elements of privatisation and liberalisation which may have been appropriate to the type of economy for which the Bretton Woods system was devised, but which are not appropriate for developing countries themselves.
Further, we used to know the role of the World Bank. The fund was concerned with assisting short-term balance of payments adjustments, but the World Bank was supposed to be concerned with longer term development. That gave rise to a certain demonology for some time in which it was reckoned that the IMF was not the goody, but the World Bank was because it was struggling for the longer term development interests of the countries concerned.
That is no longer the case. From the early 1970s there were increased demands on the IMF to provide for longer periods of adjustment. That is perhaps understandable. Inversely, from the late 1970s the World Bank became increasingly involved with assisting members with overall

balance of payments difficulties in the short term. The fund responded with the extended fund facility in 1974 and in 1980 the World Bank formalised its changing role with the creation of the structural adjustment lending programme.
In other words, the different roles of the fund and the Bank became telescoped into one. That has had extremely negative effects in the borrowing undertaken by a range of developing countries because it has given rise to a new type of conditionality. The conditions—to cut public spending, deny oneself social and welfare programmes in order to reduce money supply, domestic demand and import demand—are deflationary and are counter-productive at a global level because they give rise to a beggar-my-neighbour syndrome of reduced imports and thus a reduction of global trade. In addition, the World Bank and the fund are working together in bargaining with individual developing countries. In other words, cross conditionality has emerged. The acceptance of the conditions of one financial agency is made the condition of support by others. Thus, a bilateral aid package, such as the aid given by the United Kingdom to some of the front-line states, may be made conditional on the acceptance of an IMF stabilisation package. In turn, the World Bank's structural lending programmes and its sectoral adjustment lending have increasingly become a precondition of other flows or debt-rescheduling packages.
As recently as 18 months ago, an UNCTAD report highlighted that, for 30 of 35 structural adjustment loans approved until early 1987 by the World Bank, countries had or were waiting for imminent approval of an IMF standby or extended IMF arrangements. The IMF-World Bank seal of approval has increasingly become a precondition for a further package of private-sector lending. The Government's lending record to front-line states shows that they would lend on the bilateral programme only if the IMF approved. The World Bank would not lend unless the IMF approved. Private-sector lending is not made available unless there is a seal of approval.
The result has been a closing of options for developing countries. Fund-Bank conditionality has become far too close to that of a multilateral godfather making the same offer to Governments of a structural adjustment deal that they cannot afford to refuse.
Technical advice or conditions for the funding of programmes that governments have determined as part of their internal political process are valid and appropriate. Structural adjustment has increasingly become a policy diktat that denies not only alternative paths of development but, in many cases, the credibility of the democratic process.
I urge the Minister to consider that. He has been lavishly praised by Conservative Members, and we regret that we cannot join in that lavish praise. When we consider the overall achievement of the aid programme as a share of GNP, despite the Minister's strictures or claims against the Labour Government and their aid record, the fact remains that in 1979 the Labour Government left overseas development assistance at 0·52 per cent. of GNP, whereas it is now down to 0·28 per cent. Quality as well as quantity is important.
We know that the Minister is arguing the case for overseas aid. Rather than join him in a knockabout on a party basis, we give him credit for that. We know that he is arguing the corner for development, but the bottom line is, where is the result? If he cannot sufficiently persuade the


Government to increase the bilateral aid programme, that does not prevent him arguing the wider issues in the IMF or the World Bank. If he were to do so, he would find some friends abroad in the Governments of Italy, Spain, France, the coalition Government of Belgium, Norway, Sweden and elsewhere in Scandinavia. The fact that those friends might range from the centre to the Left rather than centre to the Right should not deter him from trying to make progress on such programmes.
If he can argue the case for debt write-off as a negotiated result of commitments made by developing countries to preserve the tropical rain forests, and if he can get negotiated results for the writing off of debt to sustain social expenditure programmes, Labour Members and a considerable share of the public will support him.
I want to elaborate my point about the social programmes and social expenditure in housing, health, education, social services, food and nutrition, sanitation, literacy and basic social services. The terms imposed by the IMF and the World Bank, contrary to the interests of the countries for which they were designed or the way in which they originally worked, amount to a negative kind of conditionality. It denies not only the possibility of social expenditure, but the possibility of autonomous development paths for many less developed countries. Of course, lending or debt write-off should be and could be carried out against certain conditions. It would be wrong to write a blank cheque to a developing country and to say, "Here's an X per cent. write-off of your debt burden whether or not you undertake programmes in food and nutrition, sanitation, literacy or social services." There would need to be conditions, but at least there could be positive conditionality and the chance could be open to countries to gain a release of debt or a loosening of the debt straitjacket if they were to undertake such programmes.
Furthermore, such programmes should not be viewed simply as an economic cost for the world's economy. For developing countries, there are productivity gains from achieving a healthy, educated and skilled labour force. That is also a key element in the productivity and efficiency gains which South Korea and Singapore have achieved. They have not achieved those results through low cost, low wage, unskilled economies, but by high cost investment in high skills and high education, and that is a crucial element in their success. Why should we deny that to other developing countries?
Developed countries would also gain from such an extension of debt release for social or environmental problems because increased spending in the south would generate increased exports from the north. It has been estimated by Gabriel Palme of Cambridge university, for example, that up to 250,000 jobs have been lost in the United Kingdom economy since 1981 precisely because of the reduction in imports by Latin America alone. Those are the ways in which the mutuality and inter-relatedness between the north and south of the global economy are costing not only the south but the north.
The development deficits that could arise as a result of new social needs programmes, along the lines that I have argued, could be and should be sustained on an accountable basis by the IMF and the World Bank over the medium to long term and funded in part through new special drawing rights issues in the IMF. I am sensitive to

the fact that other hon. Members want to speak and I shall be glad to ensure that they can do so, but I want briefly to refer to SDRs in relation to the debt reform proposals put forward by Mr. Nicholas Brady.
We have been told, outside the House, about the Brady proposals, that there is a recognition that, as opposed to the Baker plan, instead of developing countries being able to grow their way out of debt with more private finance, there will have to be debt reduction. We welcome that useful measure. But if we are to approach the issues of population control and the environment and to meet the social needs programmes, the development deficits that many of the less developed countries would have to run in the medium term would be sizeable. For that we need not a revamped Baker plan, but at least a Baker plan each year for five years. That would mean increasing SDRs by about $30 billion a year for five years. If $150 billion sounds a lot, I must remind the Minister that it would only restore the ratio of IMF lending to quotas which obtained at the time of Bretton Woods because IMF quotas, as a share of world trade, have diminished greatly since then.
Arguably, the role of the IMF and the World Bank should have been reformed 25 years ago, following the 1971 dollar devaluation, and it is imperative that their roles should be transformed now. Recent events suggest that that is possible. The United States Administration are taking a more realistic approach to debt relief, as evidenced by the Brady plan. Japan is taking more interest in putting more resources into the world economy. There is also the possibility of widening the membership of the Bretton Woods institutions, with an application by the Soviet Union to join. There is also increased coherence within the European Community.
It is especially important that Governments in the Group of Seven should make it plain to the United States that support for the dollar and an easing of the adjustment costs of the twin trade and budget deficits must imply a wider sharing of responsibility for management of such institutions as the IMF and the World Bank, even if that falls short of a new Bretton Woods conference.
In fighting the corner for development, I urge the Minister not to let go of the fact that there is a £14·5 billion budget surplus. Removing that sum from the public sector borrowing requirement or adding it to a public sector debt repayment figure is equivalent to putting it in a tin under the bed. The Minister should encourage the Treasury team to get the money out from under the bed and invest it in development.

Mr. John Bowis: This has been an interesting and symbolic week. On Monday I had the good fortune to present a debate on the arts, which had to do with the quality of life in this country. Now, on Friday, thanks to the good fortune of the hon. Member for Eccles (Miss Lestor), we are discussing the quality of life for the world as a whole. In the middle of the week, the Budget highlighted the economic health of the nation, which might perhaps enable us to look for solutions to some of the problems referred to in both those debates. I join hon. Members in congratulating my hon. Friend the Minister for Overseas Development on his work. I say that not merely because he deserves congratulation but because I


should like to add to the burden of political debt that he carries on his shoulders as he rises in the political firmament.
The hon. Member for Eccles and the hon. Member for Vauxhall (Mr. Holland) referred to debt, which is central to this problem. The hon. Member for Vauxhall made some interesting suggestions about how we might deal with debt, particularly in Brazil. We should be careful not to tie ourselves down to dealing with debt in one country at the expense of others, although perhaps other countries do not have ecological problems as serious as those in Brazil. I sympathise with the hon. Gentleman in his desire to find solutions.
I shall not dwell on the debt problem, on structural and macro-economic problems or, indeed, on agriculture or education, important though they may be. Instead, I shall consider the more visible and tangible forms of aid and how we might encourage our nation to pay attention to the needs of the world. The world has shrunk in our lifetime. It used to end at the Channel, and southern Europe was a long way away. Now, the rest of the world is much closer. I grew up with David Attenborough's "Zoo Quest", which showed funny little lizards scurrying around far-away places such as Java and Sumatra. Now, in my children's time, the world is much closer. We have had televisual tragedy but we also have many more natural history programmes of great interest. The children of this country have been leading public opinion in bringing our attention to the needs of other countries. One thinks of the impact of the "Blue Peter" campaigns and the "Blue Peter" Cambodia appeals. That country is now called Kampuchea, but it was called Cambodia when "Blue Peter" launched its appeal. The change of name highlights some of the quandaries which face us and our Government when we look at aid.
When one considers the regimes running the countries in which aid is needed, one thinks, "If only it were not that regime, we could achieve so much more." The regime in question may be oppressive, incompetent or dishonest, or it may hijack aid. There are often problems in the worst areas of need. When problems exist because of a country's own regime, the people suffering from need and hunger suffer doubly. The public are saying that, despite political problems, hon. Members must find ways of getting around the obstacles and achieving our policy of getting aid to those in need. They are saying that we must also be sensitive to ecological and environmental implications of some policies, particularly some development policies. Above all, they are saying that we must find solutions. Hon. Members sometimes consider parts of the world and say, "Yes, we should like to help them, but we will not touch that regime." When they consider Nicaragua, hon. Members on one side of the House might say that if it were Costa Rica, where we support and approve the Government, it would be much easier to persuade the House to look at the ravages caused by hurricanes and so on. Other hon. Members might say that South Africa is a no-go area for aid and we must not touch it. We must get around those attitudes and look to the needs of those countries.
I shall go beyond the subject of starvation and other issues that hit the headlines. The problems in Ethiopia, the Sudan and so on are rehearsed, known, understood, and all too real, but we need to look beyond them to hunger and deprivation world wide. We must produce a policy which captures the public imagination, as it is captured by

a red nose day, Sports Aid, Band Aid, and the many Oxfam-type events. If we can capture public imagination in regard to starvation, we should be able to do it with other issues as well. The hon. Member for Eccles will then get her Supply days and we shall have debates of this kind not just on Fridays but mid-week because there will be pressure from the public. Hon. Members will be here in force, populating the empty green Benches and discussing aid issues.
I should like my hon. Friend the Minister to consider one course which could capture the public imagination because it would capture children's imagination. That is to follow UNICEF's report on children and examine children's health. It could be put into manageable terms. Medical advances are such that, within a comparatively short period, we could conquer many of the diseases which at present ravage the people, and particularly the children, of developing countries. The problem of iodine deficiency, for example, is manageable in terms of cost and understanding. In expectant mothers, it results in hundreds of thousands of children being born with brain damage and other physical damage. Yet for a small sum—tuppence-ha'penny—per head, we could issue iodine tablets and implement immunisation programmes, and tens of thousands of children would no longer suffer.
If we could promote oral rehydration therapy around the world, for scarcely more than the present cost we could prevent the deaths of 150 million people, mainly children, who die from diarrhoea and dehydration problems. That is more than the total number of civil and military deaths in the two world wars combined and the solution is there for us to take.
If we could introduce an immunisation policy and make a dramatic effort to take it to the rest of the world, we could overcome many killer diseases. The records show that the DPT—diphtheria, pertussis, tetanus—programme which, with the measles programme, is crucial, is an effective one, but at present we protect only half the world's children. Immunisation is provided for 98 per cent. of children in Singapore, 94 per cent. in Kuwait, 93 per cent. in countries such as Chile, but only 16 per cent. in Guatemala, 9 per cent. in Bangladesh and 5 per cent. in Niger.
A programme of health cure and care is understandable to the people and children of this country. We could transform the world's health and play a real part in overcoming health problems in other countries if we, as a nation, took up that challenge. My hon. Friend the Minister should state that we are going to solve the world's health problems along those lines, and invite the private sector, individuals, companies, agencies and Parliament to join us. That challenge is surely worth taking up? It is a task worthy of the House and of the nation. If we can achieve that aim, we shall not be merely individuals adopting a child but a nation adopting the world's children.

Mr. Matthew Carrington: I too wish to add my congratulations to the hon. Member for Eccles (Miss Lestor) for selecting this subject for debate. World development and world aid are two of the most important challeges facing the world community in the next few years.
I was interested to hear that we do not receive enough days to discuss aid in this House. I cannot miss the opportunity to say that, perhaps, in the days when this used to be the imperial Parliament, international matters—particularly the problems of development in India and Africa—were debated more extensively. So perhaps we are moving backwards rather than forwards by having days on which to debate aid.
We should address two types of aid, particularly for the least developed countries. First, the type needed in emergencies, such as droughts, famines and wars, where the money to provide aid can be raised relatively easily. Pictures in newspapers of starving babies bring money flooding in, and the problem is one of distribution. Development aid is more important to this debate because it is a more difficult problem to address. How can countries be brought up to a level at which they can sustain and progress their own development through their own efforts? That is the key to the problem.
I shall make some remarks, largely from my own experience, about the practical ways in which to provide aid and finance to the developing countries. One of the great problems when providing aid is political constraint. As my hon. Friend the Member for Battersea (Mr. Bowis) has said, aid cannot be provided to a country if its political powers reject the aid. Another difficulty arises if the powers accept the aid but the population reject it and do not use it in the right way for development. I am thinking particularly of Moslem countries, of which I have most experience. Aid can be provided by western countries in such a way as to go against the cultural, social and religious sensibilities of the population, and the aid is thus rejected.
This raises the problem of the role of women in developing countries. We all know that women in Third world countries are all too often oppressed, and the progress of those countries depends largely on the progress of the women in them. But that progress is restrained by the social and religious atmosphere of those societies. It is difficult to change that from the outside. When providing aid we must encourage such change but accept that we cannot impose it. We must ensure that the aid is given in a way that is sensitive to the needs of these countries and not withheld because they do not accept our cultural, religious and social mores.
If a country is brought to a position in which it can sustain its own development, its major need is to export. The Lomé agreements have done much to provide access to European markets for the manufactured goods of developing countries. More progress is needed, but it will be painful. The sort of products that can be exported from the developing countries tend to come from industries that are labour intensive. If we accept them in volume in our markets we must recognise what we are doing: we shall be condemning some of the south European countries in the EEC to changes in their industries that will entail large scale unemployment.
It is not enough merely to provide access to these markets. It is vital that we provide guaranteed prices, too. There is no point in providing access on a free market basis if we are trying to provide development aid. The producing country must be given a guaranteed return along with access. That does not amount to a protected market; it is

a function of the aid budget, which subsidises the price at which we buy, although not perhaps the price at which we sell.
I want to say a word or two about debt, and I am conscious that my hon. Friend the Member for Twickenham (Mr. Jessel) wants to speak as well. When we restructure debt there has been talk of imposing conditions on countries that have borrowed money or want to borrow it in the future. I warn the House that the lesson to emerge from the debt crisis has been that conditions attached to debt are unenforceable. If ever we restructure debt on the assumption that a country will do something in return, we shall find as likely as not that that assumption is misplaced.

Mr. Toby Jessel: I am grateful to my hon. Friend the Member for Fulham (Mr. Carrington) for curtailing his remarks in order to give me a couple of minutes in which to make two points.
First, I hope that as much as possible of the aid that Britain provides will be given in the form of bilateral aid, not through international agencies. The average British householder is compulsorily taxed about £75 a year for overseas aid. Some people think that far too little: others think there should be no development aid at all. It is particularly difficult to please everyone on this issue, unlike other forms of provision by the Exchequer, such as road building, on which it is possible to get a broad consensus about roughly the amount that should be spent. Our development aid seems to fall in the middle of the two views held about it, so perhaps the amount being spent is not far wrong.
Apart from the primary and basic aim of helping to assuage poverty in the Third world—that must be in the forefront of our minds throughout—I want Britain to obtain the maximum possible credit and goodwill abroad for what we are doing. I want the recipient countries to know that the aid is coming from Britain. I am not particularly interested in their knowing that it comes from the EEC, the Commonwealth, part of the United Nations or any other sort of international agency. All that should be played down and the aid from Britain should be directed bilaterally and increased correspondingly.
I also want to ask my hon. Friend the Minister about the balance in aid between Asia and Africa. For historical and psychological reasons, those predisposed to support the provision of aid have a greater interest in Africa, by and large, than in Asia although the poverty is just as great in some Asiatic countries such as Bangladesh. The reasons for that may be mixed. Perhaps Africa is physically nearer to us than Asia. Perhaps there is something about the African people which invokes a more paternalistic instinct among those who want to help the poorer people of the world. It may have something to do with the history of Christian missions, which found it easier to achieve conversions in Africa than in Asia where the Hindu, Buddhist and Moslem religions were perhaps more resistant.
Aid from the European Community in particular and from Britain through bilateral aid tends to focus more on Africa. I am not very impressed by the argument that India is the single biggest recipient of aid from Britain because the population of India is nearly twice that of Africa. I hope that my hon. Friend the Minister will consider my


comments. I have not given him proper notice that I intended to raise these issues, but I hope that he will write to me fully if he cannot deal with them today.

Mr. Chris Patten: With the leave of the House, I should like to reply briefly to some of the points which have been made today.
I begin with an omnibus "Thank you" for the kind comments from some hon. Members. Adlai Stevenson once said that flattery is all right provided that one does not inhale. I do not think that anyone should underestimate the amount of flattery which most Ministers are prepared to endure in the national interest.
My right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley), in a particularly interesting speech raised several points which I would particularly like to comment upon. I will not today refer to what he said about priorities, but I hope that I shall have an opportunity to comment on that on another occasion.
With regard to the GDP deflator, which I referred to earlier, I can assure my right hon. Friend the Member for Tonbridge and Mailing that the GDP deflator that I have used is the one contained in my right hon. Friend the Chancellor of the Exchequer's Budget report. That deflator is hot off the presses. For the next financial year, the deflator forecast is 5·5 per cent. The aid programme next year, including additional funds for Nigeria, will be 10·5 per cent. higher than the originally planned aid budget for this year.
My right hon. Friend the Member for Tonbridge and Mailing referred to Sudan and the human tragedy which has been enacted there over the past year. Disasters in the Horn of Africa are in a special category reflecting the numbers at risk, the distances, inaccessibility and above all the fact that whatever difficulties nature may have wrought, man has contrived to make the situation far worse. I saw just how much worse when I visited some of the United Nations High Commissioner for Refugees camps just before Christmas at Itang and Fugnido on the Sudan-Ethiopia border.
The problems for Sudan do not, alas, come singly. Sudan must repair the damage caused by the devastating floods last year and put the economy on a sustainable basis. There is little point in trying to resolve those issues until the war in the south is settled equitably, to give confidence of a lasting peace and therefore the base for restoring economic and social life.
We were pleased to see a positive outcome to the United Nations conference in Khartoum last week. We played a full part in its proceedings and we welcome the plan of action, which must be implemented. We shall stress to all sides that what is needed now is not so much a month of tranquillity—welcome although that small respite would be—but a lasting peace.
Our connections with Sudan are close at historic, cultural and personal levels. That is all the more reason for our concern at the tragedy which has unfolded. In 1988 we committed more than £14 million for relief work in Sudan. I can assure my right hon. Friend the Member for Tonbridge and Mailing that we are ready to do more. We are in close touch with the non-governmental organisations, which have been doing such a magnificent job in difficult circumstances, about how we can perhaps do more.
My hon. Friend referred also to Afghanistan. Since 1979 we have provided more than £60 million to help the victims of war and civil conflict in that country. Last year, we doubled to £10 million our annual humanitarian assistance to agencies such as the UNHCR. the International Committee of the Red Cross, UNICEF, and British organisations such as Afghan Aid. Only last month I announced a further £500,000 for UNICEF and for the ICRC, particularly for their mother and child care programmes in Kabul and elsewhere. The international community is considering future relief operations for Afghanistan. I assure the House that we shall continue playing our full part in such humanitarian programmes.
My hon. Friend the Member for Cambridge (Mr. Rhodes James) made interesting remarks based on his profound experience of Namibia. I discussed some of his points with the leaders of SWAPO during my recent visit to Angola, and was able to assure them that the United Kingdom wishes to help them through technical co-operation, training and education in a free and independent Namibia. We have been giving Namibia some help, but have pledged a further £500,000 for the repatriation of refugees to that country in due course.
I would like to have time to follow up my hon. Friend's remarks concerning the revival of the United Nations. A number of the issues we discussed today will be dependent for a satisfactory solution on better co-ordination between, and effective delivery by, UN agencies. I am sure that my hon. Friend will play a significant role in our future discussions on that issue, because his knowledge of those matters is as great as anyone in the House
I do not have much time either to follow up the extremely important points made by the hon. Member for Linlithgow (Mr. Dalyell) concerning the environment, climate changes, and the global threats that confront us—which will be much of the stuff of international affairs and negotiations for decades. The United Kingdom is heading the scientific assessment sub-group of the intergovernmental panel of climate change. We are also playing a major role in the work of the panel's other sub-groups. The panel will report to the world climate conference in the autumn of 1990, which will provide the international community with an opportunity to consider its findings.

Mr. Dalyell: Could not Dr. John Houghton, director general of the Meteorological Office, be asked for an interim report?

Mr. Patten: I shall certainly consider the hon. Gentleman's point and respond to it in due course. As he knows, we have the benefit of expert advice on climate change within the Overseas Development natural resources institute, partly because my former permanent secretary is an international expert on the subject and, as in so many other matters, I follow in his footsteps—as well as in those of my present permanent secretary.
My hon. Friends the Members for Devizes (Sir C. Morrison) and for South Hams (Mr. Steen) referred in interesting terms to poverty and population. I welcome the support and interest from right hon. and hon. Members in all parts of the House in respect of our efforts to alleviate poverty, including our work on the health and family planning front. Direct poverty alleviation is an important element of any aid programme, and helping countries to make the transition to a lower population growth is a vital


part of assisting them achieve sustainable development. This year, we have provided more than £14 million to international bodies such as the International Planned Parenthood Federation and the United Nations fund for population activities. We have a number of bilateral aid projects in Africa and Asia concerned with health and family planning. I mention the Orissa project, and my hon. Friend the Member for Devizes spoke of placing a health and population adviser in our development division in southern Africa. We shall shortly place another adviser in our development division in east Africa. I wholly accept the importance that my hon. Friend attaches to that aspect, and I acknowledge also the importance of developing basic literacy projects and primary health care as a whole, if we are to accomplish our objectives in respect of population.
I should have liked to deal with what was said by my hon. Friends the Members for Battersea (Mr. Bowis), for Fulham (Mr. Carrington) and for Twickenham (Mr. Jessel) in their interesting speeches; I should also have liked to follow the hon. Member for Vauxhall (Mr. Holland) through his arguments about debt and the environment, but I dare say that he and I will have future opportunities to lock horns on those issues.
I recognise that my hon. Friend the Member for Hertford and Stortford (Mr. Wells) has responsibilities elsewhere which have made it impossible for him to stay for the winding-up speeches—the same is true of the hon. Member for Liverpool, Mossley Hill (Mr. Alton). My hon. Friend knows that on a number of issues, not least debt, we have found ourselves following the trail that he has blazed. I assure him in his absence that we shall be considering his comments on debt and on the Brady proposals very carefully as we take part in discussions on those matters over the next few weeks, notably at the interim meetings of the IMF and the International Bank for Reconstruction and Development next month.
We have given proper priority today to the importance of the environment in its relationship with development aid. We are grateful to the hon. Member for Eccles (Miss Lestor) for giving us this opportunity. I hope that we shall have more extensive opportunities to discuss these matters in the future, and I do not doubt that—not least thanks to the political agility of the hon. Member for Linlithgow—we shall have them.

Miss Lestor: I thank all hon. Members on both sides of the House who stayed to take part in this Friday debate. I do not know whether I am mellowing—I doubt it—but I found that I agreed at least in part with almost everything that was said. I like to think that that is because the quality of those who stayed for the debate is so high, and because of the knowledge that they have displayed. Much of our disagreement has been on matters of emphasis and of quality, not on the desire to alleviate world poverty and hunger and to do something about the environment.
The Minister rather scoffed at the promise of my right hon. Friend the Leader of the Opposition that we would double aid as a proportion of GNP. When we were last in office the figure reached 0·52 per cent., so I see no reason why we should not be able to achieve that aim when we are a Government in a few years time. I may say that we

achieved that result without the help of North sea oil revenues. The Minister mentioned disclosures in some of the diaries that are published from time to time, about the difficulties of the last Labour Government. I have no time to read such diaries when I want to find out about history, although I do occasionally go to the pictures—but perhaps we can pursue that another time.
I shall not have time to deal with all hon. Members' speeches, as I am sure that they will understand. Of course the quality of aid is important, but quality is not a substitute for quantity. The two should go together, as was pointed out by Conservative as well as Opposition Members. The tragedy of the past 10 years has been the lack of any development: in many parts of the Third world we have been marking time to stand still.
I said at the beginning that I did not think that the programme had been an unmitigated disaster. I should not dream of saying such a thing, and I join the Minister in pointing to the assistance that has gone to, for instance, Mozambique, Ghana and Kenya—three countries that I am beginning to know extremely well. At no time, either, did I say that we should treat all countries identically. In his reply the Minister said that we could not treat Mozambique and Korea in the same way. I mentioned Korea specifically in connection with a discussion that we had the other week about the International Development Association. I pointed out that Korea, which was now improving and industrialising itself, should be treated entirely differently in debt relief terms from other countries which were very much in need of assistance.
The hon. Member for Liverpool, Mossley Hill (Mr. Alton), who sent me a note in which he apologised for having to leave the debate early, referred to the environmental disasters that are likely to engulf us. He reminded us of the situation in many parts of Asia and in many other countries that rank among the poorest in the world. The right hon. Member for Tonbridge and Mailing (Sir J. Stanley) said that he is not happy about the percentage of GNP that we, compared with other countries, spend on aid. I agree with him. I join him in congratulating the "Everyman" team on its recent presentation of events in Sudan. It was frightening and horrifying, but it will have alerted many people to the problems and the needs of many poor countries.
My hon. Friend the Member for Monklands, West (Mr. Clarke) sent me a note saying that, because of his many responsibilities, he would have to leave early. I am glad that he was able to participate in the debate—as he always does in debates of this kind.
The hon. Member for Cambridge (Mr. Rhodes James) has much experience of these matters. He referred to the selfishness and the ignorance that many countries, including our own, have displayed over the years towards the destruction of the environment. He referred also to the special kind of research that alerted us to the hole in the ozone layer. I am particularly pleased that he referred to Namibia, because I did not have time to do so. As it moves towards independence, Namibia will need a great deal of help. The Minister referred to Namibia. It is a subject to which we shall return on another occasion.
I know that my hon. Friend the Member for Linlithgow (Mr. Dalyell) will return with the usual persistence for which we all admire him to global conservation problems and to the consequences for the whole world if we do not tackle them. My hon. Friend the Member for Islington, North (Mr. Corbyn) referred movingly to the fact that we


are talking about the survival of the planet, not about the survival of one country or another. I join my hon. Friend and many other hon. Members who have said that it is time that the House of Commons devoted more time to these matters and accorded to them the priority that they deserve.
The hon. Member for Devizes (Sir C. Morrison) referred to the quality of aid and to the importance of improving standards. Both he and the hon. Member for South Hams (Mr. Steen) referred to the role of women. Women's access to education will determine population growth. The history of population control shows that that is the way forward. It is only when women recognise that they have some rights that population control will become part of the agenda.
We said during the last election campaign—and I am confident that it will feature in any future election campaign—that there should be a women's unit within the Overseas Development Administration. Women's problems and needs are special. Population control is only one of them. Women's views are left out of account in many development programmes. Cultural restrictions mean that they are unable to participate fully in some of the programmes and to benefit from them. That is why it is important that there should be a special unit within the ODA that specialises in matters that concern women.
I welcome the fact that the Minister said that consideration is being given to that suggestion. Many voluntary organisations and those whom I meet during my travels round the world are conscious of that need and also of the need to concentrate on improving literacy among young people. That matter was raised by the hon. Member for South Hams and by several other hon. Members.
I often meet the hon. Member for Hertford and Stortford (Mr. Wells) at debates on a variety of subjects. I agree with him about many of the issues which he raised today, so I shall not spend time simply expressing agreement.

Mr. Carrington: Before the hon. Lady leaves the role of women in developing countries, I would appreciate it if she took on board the problems of women in the Islamic faith which affects their position socially. Women inside Islam have considerable freedoms and considerable rights as well as considerable subjection. We cannot impose on other cultures——

It being half-past Two o'clock, the debate stood adjourned.

Private Members' Bills

WEIGHTS AND MEASURES (AMENDMENT) BILL

Order for consideration read.

Hon. Members: Object.

Committee deferred till Friday 14 April.

EMPLOYMENT AGE DISCRIMINATION BILL

Order for Second Reading read.

Hon. Members: Object.

Mr. Deputy Speaker: Not moved.

BRITISH RACING COMMISSION BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 24 March.

COALMINING SUBSIDENCE (DAMAGE, ARBITRATION, PREVENTION AND PUBLIC AWARENESS) BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 24 March.

CERVICAL CANCER (TESTING AND TREATMENT) BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 24 March

MISUSE OF DRUGS BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 28 April.

CHLOROFLUOROCARBONS (CONTROL) BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 14 April.

RESALE OF TICKETS BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 28 April.

ABOLITION OF DOMESTIC RATES ETC. (SCOTLAND) ACT (AMENDMENT) BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 14 April.

RIDERS OF EQUINE ANIMALS (WEARING OF PROTECTIVE HEADGEAR) BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 24 March.

HOMES FOR THE ELDERLY BILL

Order for Second Reading read.

Hon. Members: Object.

Mr. Deputy Speaker: No day named.

BUSINESS OF THE HOUSE

Ordered,
That, at the sitting on Monday 20th March, notwithstanding the provisions of Standing Order No. 15 (Prayers against statutory instruments, &amp;c. (negative procedure)), the Motion in the name of Mr. Neil Kinnock relating to Education may be proceeded with, though opposed, for one and a half hours after it has been entered upon, and if proceedings thereon have not been disposed of at the end of that period Mr. Speaker shall then put the Question.

Ordered,
That, at the sitting on Wednesday 22nd March, notwithstanding the provisions of paragraph (1)(b) of Standing Order No. 14 (Exempted business), Motions in the name of Mr. Attorney General relating to Legal Aid and Advice may be proceeded with, though opposed, for one and a half hours after the first of them has been entered upon; and if proceedings thereon have not been previously disposed of, Mr. Speaker shall, at the expiration of that period, put any Questions necessary to dispose of them—[Mr. Garel-Jones]

Local Government Superannuation Schemes

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chapman.]

Mr. Phillip Oppenheim: I wish to raise the issue of the county council pension fund operated by Derbyshire county council on behalf of people who work for the county council and for other local authorities in Derbyshire. The operation of the county council pension fund has been the source of some concern to my constituents, some of whom are Labour voters, over the past couple of years. The concern certainly goes well beyond supporters of the Conservative party and is widespread in Derbyshire among supporters of all parties and extends even to Opposition Members of Parliament representing Derbyshire constituencies. First, I should make it clear that Derbyshire county council is one of the very few county councils in which, in effect, councillors run their own pension fund. Most county council pension funds, although technically run by the councils, are operated and executed by independent investment bodies and advisers. In Derbyshire, however, the leader of the county council and certain councillors take a very close operating interest in the running of the pension fund.
Concern about the running of the pension fund began in the summer of 1986 when the county council initially announced its intention through its pension fund, to invest £260,000 in a newspaper called News on Sunday, which advertised itself as Left-wing and non-sexist. in deference to my hon. Friend the Minister, I shall not say what the slogan was, but some hon. Members will be aware of it. At the time of the investment, many people warned the county council that it was wrong to invest in such an overtly political publication and that the newspaper was not viable, but the county council failed to heed those warnings or to take any proper independent advice as to whether it was a sound investment.
The warning voices proved to be correct and in June 1987 the newspaper ran into severe financial difficulties and had to be bailed out by a self-styled Left-wing entrepreneur by the name of Owen Oyston, who made a great deal of money operating an estate agency in Manchester and the north-east. Mr. Oyston refinanced the newspaper and took a large chunk of the equity, diluting the equity holdings of the original investors, including Derbyshire county council. In the process, it is reported that he paid himself £4,000 a week in consultancy fees. I understand that Mr Oyston has never denied that figure, but it puts an interesting light on the supposed altruism of his gesture in rescuing the newspaper.
Despite the apparently well-paid efforts of Mr. Oyston, the newspaper finally packed up in November 1987. At that time, Derbyshire county council came under severe criticism and confusion seemed to reign at its headquarters in Matlock. Councillor Bookbinder, the leader of the county council, claimed publicly that the pension fund investment in News on Sunday was safe. Subsequently, in an article in the Derby Evening Telegraph on 20 November 1987, the leader of the council was quoted as saying that the investment was in Growfar Limited and not the News on Sunday and that Growfar would continue in business. In a subsequent letter to me, the leader of the council told


me that the county council pension fund did not have any holding in Growfar. He has subsequently refused to elaborate on the subject.
On 16 December 1987 the Derby Evening Telegraph reported that the county council pension fund's share in Growfar had been sold to Mr. Oyston for £400,000. Councillor Bookbinder waved a cheque claiming that, far from making a loss on the News on Sunday deal, he had made a substantial profit of £95,000. He also announced that Derbyshire county council was planning to set up a new joint company with Mr. Oyston called Telemags. However, that is not the whole story. Confidential investment panel minutes later showed that as part of the negotiation whereby Mr. Oyston paid £400,000 for the council's share in Growfar the council agreed to invest the same sum in Telemags. It was grossly misleading for Councillor Bookbinder to claim that he had made a profit on the deal. In fact, he had secured a face-saving deal whereby Mr. Oyston initially bought out his share for £400,000 and then subsequently the county council pensioners were forced to invest the same amount in another of Mr. Oyston's ventures. Furthermore, apart from the £400,000 investment in Telemags, it was contemplated that a further £2 million over a two-year period would be invested in yet another of Mr. Oyston's companies.
In January 1988 Councillor Bookbinder announced in the Derby Evening Telegraph that the £400,000 was to be invested in Telemags. However, when I wrote to the leader of the county council asking whether there was any link between the buy-out of the shares and the agreement to invest in Telemags, he replied on 11 January refusing to answer any of my questions. In an article on 8 January in the Ilkeston Advertiser Councillor Bookbinder denied that there were any strings attached to the sale of the News on Sunday shares. That was shown to be completely untrue by the confidential investment panel minutes which came into my possession.
Apart from the somewhat dubious deals involving News On Sunday, which were motivated more by political than by commercial objectives, there is the vexed subject of the county council's dealings in a Russian leisure centre, which were first mentioned with a blaze of publicity in March 1988. Despite the media spotlight which Councillor Bookbinder ensured was put on his dealings in Russia, little concrete information was released about what the deal involved. Initially, Councillor Bookbinder said that no ratepayers' or pension fund money would be involved, but subsequently it became apparent that not only were his trips to Russia financed by ratepayers but that ratepayers were to pay £20,000 for a feasibility study on the deal.
The dealings in the Russian leisure centre are extremely dubious, especially in view of some of the comments made by the county council's leader. It has been said that the deal is a millionaire's playground without the millionaires and that it would involve a recoupment of the investment by a factor of four. It may be all well and good for a commercial company to risk capital investment in a leisure centre, millionaires' playground, marina or hotel in the Soviet Union, but it is quite another thing for a leader of a county council to use ratepayers' money, pension fund money or whoever's money it is for such a deal. I sincerely hope that the deal will be profitable, however, as it will otherwise be a serious matter for pension fund holders and ratepayers in Derbyshire. We must ask whether it is right and proper for a county council leader to involve himself,

ratepayers and possibly pension fund holders in such a deal, which is more rightly the preserve of commercial companies.
A further matter which is much concerning the people of Derbyshire about the pension fund dealings relates to a company called Jebwill. On 16 May 1988, confidential minutes of the delegation's sub-committee of the policy committee reported Jebwill's decision to acquire up to £2 million worth of shares in Red Rose radio—a radio station effectively controlled by none other than Mr. Oyston, while Jebwill is effectively controlled by the county council pension fund. The county council pension fund also announced that it would subscribe to 2 million Jebwill seed shares. Later, Red Rose merged with the Miss World group in which Mr. Oyston had a 30 per cent. stake and Jebwill now has a 7·9 per cent. stake in Mr. Oyston's expansion into the Miss World group.
It is deeply suspicious that the county council is involving yet more pension fund money in Mr. Oyston's ventures. The ventures may be profitable, but I question whether the investment decisions are being made primarily on commercial and economic grounds, rather than being motivated by a desire to achieve publicity or to posture publicly on the part of the leader of the county council, Councillor Bookbinder. Those deals are highly suspicious. Furthermore, the cloak of confidentiality that the council leader has put around the deals further arouses my suspicion and that of many other people.
It is ironic that a council and a council leader, who continually miss no opportunity to profess their belief in the freedom of information, have fought an expensive legal battle——

Mr. Harry Barnes: Will the hon. Gentleman give way?

Mr. Oppenheim: I will give way in a minute.
It is suspicious that a council which took expensive legal action to ensure that its libraries could stock the "Spycatcher" book, and which has been bitterly critical not only of the Official Secrets Bill but of the Official Secrets Act 1920 and the Government's involvement in the Spycatcher case, could none the less release so little information about the commercial dealings of its own pension fund.
I have asked a series of questions directly to Councillor Bookbinder relating to the pension fund dealings, but I have consistently been stonewalled and have never received proper replies. On 21 November 1988, for example, I sent a detailed list of 20 questions to Councillor Bookbinder. All that I received was a letter saying that Councillor Bookbinder felt that those issues were matters of commercial confidentiality and that although he would be happy to debate the issue he was not prepared to release the answers to my questions before the debate.
I am the first to accept that there are occasions when it is right to declare commercial confidentiality. When a council is putting out tender documents for a contract, for example, it is right that there should be commercial confidentiality while the tendering process goes forward.

Mr. Harry Barnes: Will the hon. Gentleman give way?

Mr. Oppenheim: I said that I would give way in due course. The hon. Gentleman should hold himself in check. I will give way in a minute.
It is legitimate during the negotiating stage of certain deals for a county council pension fund to involve itself in deals which it initially cloaks in commercial confidentiality. What is wholly wrong is that, when engaging in the controversial and politically motivated deals in which Derbyshire county council has involved itself, it should use the excuse of commercial confidentiality when clearly there is no legitimacy for it. It is not fair to say that every aspect of every deal in which a county council pension fund is involved should be commercially confidential. The ratepayers of Derbyshire and the pension fund holders have an absolute right to the full details of the dealings involving Mr. Oyston, Councillor Bookbinder, Jebwill, the proposed millionnaires' playground without the millionnaires at Yalta in the Crimea in the Soviet Union, and all the other companies, such as Growfar, News on Sunday and Telemags, in which the county council has invested large sums of pension fund money but about which little is known.
It is customary, when hon. Members wish to intervene in or to contribute to an Adjournment debate, that they write to ask consent for that. I have received no such missive from the hon. Member for Derbyshire, North-East (Mr. Barnes), but as an act of wholly gratuitous goodwill to a fellow Derbyshire Member of Parliament who shares my deep concern about the operations of the county council pension fund—if he does not, he certainly should—I will give way and allow the hon. Gentleman to intervene.

Mr. Harry Barnes: I thank the hon. Gentleman for giving way, despite his preamble. I am rather disappointed with his contribution because I stayed especially for this debate. I intervened because it seemed appropriate. One cannot plan an intervention before one comes to the House. Had I done so, it would have been to say that the hon. Gentleman should come outside to make his remarks because legal action might need to be taken against him, but I do not need to say that because he has said nothing of significance.
The hon. Gentleman has told us that the county council uses venture capital which is about 3 per cent. of total expenditure—the specific money to which he referred is about 0·5 per cent.—and I would have thought that he would have supported the fact that the council is in the market to make money, like any good capitalist. The hon. Gentleman also complained about councillors travelling the world, although he and the Prime Minister do so. The councillors travelled to raise capital and it is said to be a worthwhile reason.
The hon. Gentleman said that Derbyshire Members of Parliament, meaning all of us, were worried about what was happening. Neither my hon. Friend the Member for Bolsover (Mr. Skinner) and myself, nor the other two Labour Members for Derbyshire constituencies, are worried. I notice that no other Conservative Members are here to back up the hon. Gentleman.

Mr. Oppenheim: I thank the hon. Member for Derbyshire, North-East (Mr. Barnes) for his comments. The hon. Member for Bolsover (Mr. Skinner) has done a good job of winding the hon. Gentleman up and setting him off in the right direction—I could almost see him pulling the strings. Having said that, I think that the hon.

Member for Derbyshire, North-East did a pretty good job trying to defend the county council, although I should point out that Ministers go abroad to try to promote British industry because they have a responsibility to boost our exports. County councillors, on the other hand, should accept that their main role is to promote and boost efficiency and value for money in the provision of local services. They are not international statesmen and they do not have a role posing and posturing on the world stage as Councillor Bookbinder seems to think. It is a great shame because Councillor Bookbinder is clearly a man of great energy and some intelligence and it would be to the benefit of everyone in Derbyshire if he concentrated his efforts on trying to achieve value for money for ratepayers and users of services.
The hon. Member for Derbyshire, North-East said that I should say outside the House what I have said here. I do not think that I have said anything today that I have not already put into print on numerous occasions or that I have not already said in Derbyshire, so the hon. Gentleman need have no worry that I am trying to hide behind the cloak of privilege as I most certainly am not. The hon. Gentleman also said that other Derbyshire Members were not here to support me. My hon. Friends discussed the matter with me and they fully agree with what I have said but, needless to say, they are confident in my ability to handle the debate alone and saw no reason to be present. They preferred to be in their constituencies, where many hon. Members spend their Fridays.
The hon. Member for Derbyshire, North-East said that he was not in the least worried about the county council's pension fund dealings and claimed that the same was true of his hon. Friend the Member for Bolsover. If they are not concerned, they certainly should be. One of their colleagues on the Opposition Benches who does not come from Derbyshire has apparently made a special trip to Matlock to express his deep disquiet to the leader of the county council, Mr. Bookbinder. The hon. Member for Derbyshire, North-East should open his eyes because while he may not be concerned, his constituents most certainly are.

The Parliamentary Under-Secretary of State for the Environment (Mrs. Virginia Bottomley): I am pleased to respond to my hon. Friend the Member for Amber Valley (Mr. Oppenheim), whose constituents are fortunate to have as their representative someone who is so vigorous and diligent in pursuing their interests.
I should, perhaps, begin by explaining the factual position. The local government superannuation scheme is contained in detailed regulations made by my right hon. Friend the Secretary of State. The regulations require 88 authorities—mainly county councils in England and Wales and London boroughs—to maintain superannuation funds for the purpose of paying benefits under the scheme as they fall due. The current total value of the fund is estimated to be about £25 billion.
The regulations require the funds to be invested, and lay down certain rules that are to apply to such investment. No more than 5 per cent. of a fund may be invested with any one company, and no more than 10 per cent. may be invested in unlisted securities. Authorities are also required to have regard to the need to diversify their


investments, to the suitability of any proposed investment, and to expert financial advice, which they must obtain at reasonable intervals.
The regulations stipulate that each fund is to be valued by an actuary at five-yearly intervals. In the light of his valuation the actuary is required to fix the contributions which local authorities and other employers in the area must pay into the fund over the next five years. These contributions come direct from the rates, and it follows that the investment performance of a pension fund can have a substantial effect on the amounts which authorities need to find from the rates. That is one of the reasons why my hon. Friend is so concerned in this case.
In recent years, this effect has often been disguised by the fact that, because returns on investments have been high, most of the funds are in considerable surplus. But that does not alter the fact that, if a particular investment fails, the call on the rates will be greater than would otherwise have been the case.

Mr. Dennis Skinner: Will the Minister give way?

Mrs. Bottomley: I will not give way, because I have little time in which to speak. The hon. Gentleman has recently had two Adjournment debates in which he could have raised matters relating to Derbyshire.
In 1986–87, it was reported that some Labour-controlled local authorities, including Derbyshire county council, had invested money belonging to their superannuation funds in the Left-wing newspaper the News on Sunday, as my hon. Friend has explained. When the company went into liquidation after a few weeks, most of the authorities lost their entire investments, although, as my hon. Friend explained, Derbyshire managed to recoup its initial outlay. Since that time, there have been further reports about alleged investments by the Derbyshire fund, some of which my hon. Friend has explained this afternoon.
I understand that the Derbyshire superannuation fund is valued in excess of £300 million. It seems unlikely, therefore, that any of the investments has offended against the limits laid down in the regulations to which I have referred, requiring no more than 5 per cent. of the fund to be invested with any one company, or 10 per cent. in unlisted securities, which is what the News on Sunday shares were. Any other question about the legality of the investments, such as whether the council had had sufficient regard to the suitability of any proposed investment or the overall requirement to diversify those investments and act in the light of expert financial advice, would be a matter for the district auditor, rather than my right hon. Friend the Secretary of State.
It may well be that some of the investments were imprudent, in the sense that councillors must have been aware of the risks involved. It is open to any ratepayer in the county to take appropriate action if he or she considers that such imprudence might have put up the rate bill.
What I know for certain is that it will not be the employees of Derbyshire county council, or its constituent districts, or the pensioners who suffer as a result of any losses sustained by the fund. The future benefits of the 20,700 employees who are current members of the fund are absolutely protected by statute. So are the pensions and pensions increases of the 9,000 pensioners currently drawing pensions from the fund, and the 3,000 or so other

former employees who have deferred pension rights from the fund. The rights of those 30,000 or so people are very adequately protected by statute.
However, once again, the 420,000 ratepayers of Derbyshire, about whom hon. Members often hear, will stand to lose, by rash or poorly thought through investment decisions by those controlling the pension fund. They might wish that they had a similar absolute assurance that the finances of their county council would always be handled with the kind of prudence that they might expect.
This year, Derbyshire has succeeded in achieving a reduction of about 2 per cent. in the level of its precept. That measure of relief must be welcomed by the hard-pressed ratepayers who, for years, have had the highest rate poundage of any county council. This year, they are beaten only by similarly Labour-controlled Cleveland. Although I understand that, if the council had made prudent and cautious decisions, such as those made by the council in the district represented by my hon. Friend, it could have done much better. The rate could have been cut by 8 per cent. The fact remains that Derbyshire still has the second highest rate precept of all the shire counties and the highest rate of spending, in relation to estimated need, of all those councils. I imagine that the ratepayers would be much happier if their councillors concentrated rather more of their efforts on bringing rates down to a more acceptable level and spent less money on investing in enterprises such as short-lived newspapers, in which the attraction seems to lie in their political purity rather than the soundness of their finances.
More generally, Ministers must clearly be concerned by reports such as those brought to us by my hon. Friend the Member for Amber Valley, that investments are being made on other than commercial considerations, and we are considering whether the regulations need to be strengthened to deter such activities. That is difficult, because the rules apply to all 88 fund authorities and we have no wish to shackle those who are blameless in order to catch those who may be tempted to act improperly. However, I can assure my hon. Friend that we are considering the position to see what can be done, and I am grateful to him for drawing this to the attention of the House.
My right hon. Friend the Minister for Local Government is today in Derbyshire meeting council leaders and visiting some of the districts.
It is understandable that my hon. Friend the Member for Amber Valley should be particularly outraged as a result of the behaviour of Derbyshire county council when, by contrast, Amber Valley district council has only recently, saved £2·5 million by moving swiftly to put all its services out to tender.
Our model is that local government should fairly, effectively and efficiently represent the interests of the ratepayers, provide services in an efficient, cost effective, manner and give value for money.
I was interested that my hon. Friend the Member for Amber Valley and the hon. Member for Derbyshire, North-East (Mr. Barnes)—with whom I debated earlier this week—referred to libraries because they are a sore point in Derbyshire. As my hon. Friend the Member for Derbyshire, West (Mr. McLoughlin) well knows, the council spends more distributing fewer books than neighbouring Staffordshire. Once again, that is an example of a county council which is more concerned with political


gestures than with considering its hard-pressed ratepayers. We are confident that, as we move towards the community charge system, such behaviour will be exposed to local charge payers for what it is.

The Motion having been made after half past Two o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at two minutes past Three o'clock.